ABSTRACT
This paper studies the neural basis of decision-making in the ultimatum bargaining game using the EEG technique. Our main goal is to explore the methodological potential in employing EEG in neuroeconomics, using a well-studied game. Specifically, the paper aims to understand: (i) whether the EEG procedure can generate similar results to those found in the previous ultimatum game experiments conducted using fMRI (Sanfey et al., 2003), (ii) whether the superior temporal resolution of the EEG can generate additional insights. Our main methodology is to study the correlation of electrical activation in different areas of the brain with behavior in the ultimatum game, using previous fMRI studies for interpretation. We find that neural activity is able to explain a significant part of the variation in rejection decisions, with interesting localization results that replicate and extend previous fMRI studies. The results along the time dimension also illustrate that the EEG method can identify novel patterns in the time course of neural activity thanks to its superior temporal resolution.