Co-authored Paper by Associate Researcher Zhu Chengkang Published Online in Top Journal of Behavioral and Organizational Economics Journal of Economic Behavior & Organization

Recently, the co-authored paper Expectations matter in bottom-line setting: Theory and evidence by Associate Researcher Zhu Chengkang from the School of Economics and the Institute for the Study of Brain-Like Economics, Shandong University, was published online in Journal of Economic Behavior & Organization, a top journal in the field of behavioral and organizational economics. The paper was co-authored by Professor Li Jianbiao, Associate Researcher Zhu Chengkang, doctoral candidate Chen Peikun from the School of Economics, Shandong University, and Dr. Pan Jingjing from the University of Jinan, with Associate Researcher Zhu Chengkang as the corresponding author.

This study focuses on the core issue in economic negotiations—the setting mechanism of the minimum acceptable offer (MAO), and for the first time experimentally verifies the causal effect of respondents' expectations on their bottom-line decision-making, revealing the key role of bounded rationality. The research team designed ultimatum game experiments in two different scenarios, systematically analyzing the explanatory power of reference-dependent preferences, frustration aversion, and bounded rationality models on decision-making behavior by exogenously manipulating respondents' expectations of the offer distribution (high, medium, and low scenarios). The experiment finds that when respondents do not know the actual offer, expectations significantly affect their MAO setting; when the offer is known, the expectation effect disappears. The experimental results in the two different scenarios verify the predictions of the bounded rationality model, providing new evidence for cognitive biases in negotiation decisions. The study further reveals a key source of differences between the "strategy method" and the "direct response method" in experimental economics. The traditional view holds that emotion is the main driving factor leading to differences between the two experimental methods, while this study shows that decision-makers' expectation biases for unoccurring scenarios in the strategy method can also lead to behavioral differences.

Zhu Chengkang is an Associate Researcher at the School of Economics and the Institute for the Study of Brain-Like Economics, Shandong University. His research fields include behavioral economics, neuroeconomics, and behavioral finance. He has published many articles in international journals such as Journal of Economic Behavior & Organization, NeuroImage, and Social Cognitive and Affective Neuroscience.