While fairness is often mentioned as a determinant of ultimatum bargaining behavior, few data sets are available that can test theories that incorporate fairness considerations. This paper tests the reciprocal kindness theory in Rabin (1993 Incorporating fairness into game theory and economics, The American Economic Review 83: 1281-1302) as an application to the one-period ultimatum bargaining game. We report on data from 100 ultimatum games that vary the financial stakes of the game from 1 to 15. Responder (...) behavior is strongly in support of the kindness theory and proposer behavior weakly in support of it. Offer percentages and past offers influence behavior the most, whereas the size of the pie has a marginally significant effect on offer percentages. The data is more in support of reciprocal kindness than alternative theories of equal-split or learning behavior, although the data also weakly support a minimum percentage threshold hypothesis. As a whole, our results together with existing studies suggest that, for smaller stakes games, fairness considerations dominate monetary considerations. This has implications for more complicated naturally occurring bargaining environments in which the financial stakes can vary widely. (shrink)

Although the role of emotion in socioeconomic decision making is increasingly recognised, the impact of specific emotional disorders, such as anxiety disorders, on these decisions has been surprisingly neglected. Twenty anxious patients and twenty matched controls completed a commonly used socioeconomic task (the Ultimatum Game), in which they had to accept or reject monetary offers from other players. Anxious patients accepted significantly more unfair offers than controls. We discuss the implications of these findings in light of recent models of (...) anxiety, in particular the importance of interpersonal factors and assertiveness in an integrated model of decision making. Finally, we were able to show that pharmacological serotonin used to treat anxious symptomatology tended to normalise decision making, further confirming and extending the role of serotonin in co-operation, prosocial behaviour, and social decision making. These results show, for the first time, a different pattern of socioeconomic behaviour in anxiety disordered patients, in addition to the known memory, attentional and emotional biases that are part of this pathological condition. (shrink)

This book presents the “pleasure phenomenon” as the most important factor in individual and socio-cultural development. This study emphasizes the necessity of transformation of marketing in the 21st Century which would shift the focus from seeking pleasure to controlling desires in a way that would benefit self and society.

Volume 19, Issue 9, September 2019, Page 54-56.

The Ultimatum Game is one of the most successful experimental designs in the history of the social sciences. In this article I try to explain this success—what makes it a “paradigmatic experiment”—stressing in particular its versatility. Despite the intentions of its inventors, the Ultimatum Game was never a good design to test economic theory, and it is now mostly used as a heuristic tool for the observation of nonstandard preferences or as a “social thermometer” for the observation of (...) culture‐specific norms. †To contact the author, please write to: Department of Sociology and Philosophy, University of Exeter, Amory Building, Exeter EX4 4DT, UK; e‐mail: [email protected]. (shrink)

The Ultimatum Game is commonly interpreted as a two-person bargaining game. The third person who donates and may withdraw the money is not included in the theoretical equations, but treated like a neutral measurement instrument. Yet in a cross-cultural analysis it seems necessary to consider the possibility that the thoughts of a player – strategic, altruistic, selfish, or concerned about reputation – are influenced by both an anonymous second player and the non-anonymous experimenter.

Unfair offers in bargaining may have disruptive effects because they may reduce interpersonal trust. In such situations future trust may be strongly affected by social accounts (i.e., apologies vs. denials). In the current paper we investigate when people are most likely to demand social accounts for the unfair offer (Experiment 1), and when social accounts will have the highest impact (Experiment 2). We hypothesized that the need for and impact of social accounts will be highest when the intentions of the (...) other party are uncertain. The results provided support for this reasoning. (shrink)

The ultimatum game is a simple bargaining situation where the behavior of people frequently contradicts the optimal strategy according to classical game theory. Thus, according to many scholars, the commonly observed behavior should be considered irrational. We argue that this putative irrationality stems from a wrong conception of metanormativity (the study of norms about the establishment of norms). After discussing different metanormative conceptions, we defend a Quinean, naturalistic approach to the evaluation of norms. After reviewing empirical literature on the (...) ultimatum game, we argue that the common behavior in the ultimatum game is rational and justified. We therefore suggest that the norms of economic rationality should be amended. (shrink)

Kinship and reciprocity are two main predictors of altruism. The ultimatum game has been used to study altruism in many small-scale societies. We used the ultimatum game to examine effects of individuals’ family and kin relations on altruistic behavior in a kin-based horticultural community in rural Dominica. Results show sex-specific effects of kin on ultimatum game play. Average coefficient of relatedness to the village was negatively associated with women’s ultimatum game proposals and had little effect on (...) men’s proposals. Number of brothers in the village was positively associated with men’s ultimatum game proposals and negatively associated with women’s proposals. Similarly, presence of father in the village was associated with higher proposals by men and lower proposals by women. We interpret the effect of brothers on men’s proposals as a consequence of local competition among brothers. We speculate that daughter-biased parental care in this community creates a sense of entitlement among women with brothers, which may explain the inverse relation between number of brothers and women’s ultimatum game proposals. The pattern of results may be consistent with how matrifocality affects cultural models of fairness differently along gender and family lines. (shrink)

Empirical research has discovered that experimental subjects in ultimatum bargaining situations generally fail to play the decision-theoretic optimum strategy, and instead play something between that strategy and a fair split. In evolutionary dynamics, fair division and nearly fair division strategies often go to fixation and weakly dominated strategies can do quite well. Computer simulations were done using three different ultimatum bargaining games as determinates of fitness. (1) No tendency toward the elimination of weakly dominated strategies was observed, with (...) or without mutation. (2) Strategies making fair demands had sizable basins of attraction. (3) In a system where five different demands can be made, demands closest to (approximately) 91% had the largest basins of attraction. (4) If the strategies have thresholds for acceptable demands, rather than individuated responses to each demand, the apparent optimum demand may be quite low: 64% for one set of trials. (shrink)

The predictive validity of the ultimatum game (UG) for cross-cultural differences in real-world behavior has not yet been established. We discuss results of a recent meta-analysis (Oosterbeek et al 2004), which examined UG behavior across large-scale societies and found that the mean percent offers rejected was positively correlated with social expenditure.

According to the dual-system theories, the decisions in an ultimatum game are governed by the automatic System 1 and the controlled System 2. The former drives the preference for fairness, whereas the latter drives the self-interest motive. However, the association between the contributions of the two systems in UG and the cognitive process needs more direct evidence. In the present study, we used the process dissociation procedure to estimate the contributions of the two systems and recorded participants eye movements (...) to examine the cognitive processes underlying UG decisions. Results showed that the estimated contributions of the two systems are uncorrelated and that they demonstrate a dissociated pattern of associations with third variables, such as reaction time and mean fixation duration. Furthermore, the relative time advantage and the transitions between the two payoffs can predict the final UG decisions. Our findings provide evidence for the independent contributions of preference for fairness and self-interest maximizing inclinations to UG and shed light on the underlying processes. (shrink)

We modify the payment rule of the standard divide the dollar (DD) game by introducing a second stage and thereby resolve the multiplicity problem and implement equal division of the dollar in equilibrium. In the standard DD game, if the sum of players’ demands is less than or equal to a dollar, each player receives what he demanded; if the sum of demands is greater than a dollar, all players receive zero. We modify this second part, which involves a harsh (...) punishment. In the modified game $(D\!D^{\prime })$ , if the demands are incompatible, then players have one more chance. In particular, they play an ultimatum game to avoid the excess. In the two-player version of this game, there is a unique subgame perfect Nash equilibrium in which players demand (and receive) an equal share of the dollar. We also provide an $n$ -player extension of our mechanism. Finally, the mechanism we propose eliminates not only all pure strategy equilibria involving unequal divisions of the dollar, but also all equilibria where players mix over different demands in the first stage. (shrink)

This paper presents the results of a within-subject experiment testing whether an increase in the monetary stakes by a factor of 50 – which had never been done before – influences individual behavior in a simple ultimatum bargaining game. Contrary to current wisdom, we found that lowest acceptable offers stated by the responder are proportionally lower in the high-stake condition than in the low-stake condition. This result may be interpreted in terms of the type of utility functions which characterize (...) the subjects. However, in line with prior results, we find that an important increase of the monetary stakes in the ultimatum game has no effect on the offers made by the proposer. Yet, the present research suggests that the reasons underlying these offers are quite different when the stakes are high. (shrink)

The hukou system is a mandatory household registration system in China that assigns an individual either an urban/non-agricultural hukou or a rural/agricultural hukou based on one’s birthplace. This system favors urban residents and discriminates against rural residents in accessing state-owned resources such as employment, education, health care, and housing. To better understand how this institutionally imposed hukou identity impacts an individual’s sense of fairness in the ultimatum game, we conducted a field experiment in China using 9–12-year-old children and collected (...) 672 observations. Subjects played a one-shot ultimatum game to allocate 20 yuan in groups of two. We employed a 2 ×\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$\times $$\end{document} 2 ×\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$\times $$\end{document} 2 experiment design and used the strategic method ultimatum game. We primed our subjects with their hukou identity before they made their decisions in the experiment. Results of this study show that hukou salience mainly affects rural hukou subjects, who belong to the perceived less-favored social group. On one hand, when the hukou identity is made salient, rural hukou proposers decrease their amount offered regardless of their responder’s hukou type. On the other hand, rural hukou responders expect higher offers from their urban hukou proposers when the hukou identity is revealed. We interpret these results as that rural hukou subjects tend to seek compensations for their perceived hukou inferiority to achieve fair distributions. (shrink)

This paper offers a novel interpretation of the 1890 British Ultimatum, by bringing to the front of the stage its techno-diplomatic dimension, often invisible in the canonical diplomatic and military narratives. Furthermore, we use an unconventional historical source to grasp the British–Portuguese imperial conflict over the African hinterland via the building of railways: the cartoons of the politically committed and polyvalent Portuguese artist and journalist Rafael Bordalo Pinheiro (1846–1905), published in his journal Ponto nos iis, from the end of (...) 1889 and throughout 1890. We argue that the Ponto nos iis cartoons played a so far overlooked role in the unfolding of British–Portuguese affairs, as they shaped at a distance a diplomatic exchange with the British satirical journal Punch. Attacking and counterattacking his fellow cartoonists in Britain, Pinheiro surged into the role of informal diplomat. This cartoon visual and public diplomacy unfolded in the pages of both journals and was tied to the two countries’ colonial conquests in Africa, where the Portuguese and British empires were competing to dominate the African hinterland through large technological systems. Hence the cartoons made visible to wider audiences the otherwise hidden role that technologies played in the two countries’ affairs. In turn, the cartoons aimed at persuading the Portuguese public and ruling classes alike that only regime change, from monarchic to republican, would restore the wounded Portuguese national pride. (shrink)

Interpersonal responsibility is an indigenous Chinese personality construct, which is regarded to have positive social functions. Two studies were designed to explore the relationship among interpersonal responsibility, proposal allocation ratio, and responders’ hostile decisions in an ultimatum game. Study 1 was a scenario study using a hypothetical ultimatum game with a valid sample of 551 high school students. Study 2 was an experimental study which recruited 54 undergraduate students to play the incentivized ultimatum game online. The results (...) of the two studies showed a significantly negative correlation between interpersonal responsibility and responders’ rejection responses only when the proposal allocation ratio was 3:7. In addition, in study 2, interpersonal responsibility had negative effects on responders’ rejection responses under the offer of 3:7, even after controlling for the Big Five personality traits. Taken together, proposal allocation ratio might moderate the effects of interpersonal responsibility on hostile decision-making in the ultimatum game. The social function of interpersonal responsibility might be beyond the Big Five. Keywords: interpersonal responsibility, proposal allocation ratio, hostile decision-making, moderator, ultimatum game, Big Five personality. (shrink)

We present a metapopulation dynamic model for the diffusively-coupled rock-paper-scissors game with mutation in scale-free hierarchical networks. We investigate how the RPS game changes by mutation in scale-free networks. Only the mutation from rock to scissors occurs with rate μ. In the network, a node represents a patch where the RPS game is performed. RPS individuals migrate among nodes by diffusion. The dynamics are represented by the reaction-diffusion equations with the recursion formula. We study where and how species coexist or (...) go extinct in the scale-free network. We numerically obtained the solutions for the metapopulation dynamics and derived the transition points. The results show that, with increasing mutation rate μ, the extinction of P species occurs and then the extinction of R species occurs, and finally only S species survives. Thus, the first and second dynamical phase transitions occur in the scale-free hierarchical network. We also show that the scaling law holds for the population dynamics which suggests that the transition points approach zero in the limit of infinite size. (shrink)

This paper presents the experimental results of a “Transcontinental Ultimatum Game” implemented between India and France. We use a standard ultimatum game, but in one treatment Indian subjects made offers to French subjects (ItoF treatment) and, in another treatment, French subjects made offers to Indian subjects (FtoI treatment). We observed that FtoI treatment bargaining mostly ended up with unequal splits of money in favor of French, while nearly equal splits were the most frequent outcome in ItoF treatment interactions. (...) The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects. (shrink)

PURPOSE: The conventional wisdom in dental and medical education is that dental and medical students experience "ethical erosion" over the duration of dental and medical school. There is some evidence for this claim, but in the case of dental education this evidence consists entirely of survey research, which doesn't measure behavior. The purpose of this study was to measure the altruistic behavior of dental students, in order to fill the significant gap in knowledge of how students are disposed to behave, (...) rather than how they are disposed to think. -/- METHODS: To test the altruistic behavior of dental students, we conducted a field experiment using the Ultimatum Game, which is a game commonly used in economics to observe social behavior. Students from each of the four years of dental school played the game in standardized conditions with real money. -/- RESULTS: Students exhibited greater levels of altruism than the general population typically does. Students' altruism peaked in year four. Students' altruism was associated with the socioeconomic status of responder. -/- CONCLUSION: The results suggest that that dental students are more altruistic than the population average and that altruism increases during their education. Thus, if a decreasing ability to behave altruistically is observed during dental school, it is not likely due to a general disposition of students, but rather some factor specific to the educational environment in which the decrease is observed. (shrink)

Benzodiazepines and antidepressants have been shown to change responses to unfairness; however, the effects of their combined use on unfairness evaluation are unknown. This study examines the effects of concomitant benzodiazepines and antidepressants long-term use on the evaluation of fair and unfair offers. To analyze behavioral changes on responses to unfairness, we compared the performance of medicated participants and healthy controls in the Ultimatum Game, both in the proposer and in the respondent role. The results showed that long-term psychotropic (...) users had the worse economic strategy by accepting less offers than control subjects. However, in the proposer role, the unfair offers made by participants were similar between groups. The present results suggest that long-term use of psychotropic medication, specifically the combination of benzodiazepines and antidepressants, may increase the sensitivity to unfairness, resulting in higher rejection rates in conditions where this strategy is the most disadvantageous. (shrink)

The current study investigates whether self-talk phrases can influence behavior in Ultimatum Games. In our three self-talk treatments, participants were instructed to tell themselves (i) to keep their own interests in mind, (ii) to also think of the other person, or (iii) to take some time to contemplate their decision. We investigate how such so-called experimenter-determined strategic self-talk phrases affect behavior and emotions in comparison to a control treatment without instructed self-talk. The results demonstrate that other-focused self-talk can nudge (...) proposers towards fair behavior, as offers were higher in this group than in the other conditions. For responders, self-talk tended to increase acceptance rates of unfair offers as compared to the condition without self-talk. This effect is significant for both other-focused and contemplation-inducing self-talk but not for self-focused self-talk. In the self-focused condition, responders were most dissatisfied with unfair offers. These findings suggest that use of self-talk can increase acceptance rates in responders, and that focusing on personal interests can undermine this effect as it negatively impacts the responders’ emotional experience. In sum, our study shows that strategic self-talk interventions can be used to affect behavior in bargaining situations. (shrink)

Unlike other creatures, humans developed the ability to cooperate with genetically unrelated strangers and a tendency to comply with social norms. However, humans deviate from social norms in various situations. This study used the modified ultimatum game to explore why humans deviate from social norms and how their prosocial behavior can be promoted. In Study 1, participants were asked to imagine working with an anonymous counterpart to complete a task and obtain a certain amount of money (e.g., ¥10). The (...) computer divided the money randomly in favor of the participant (e.g., 9:1 or 8:2). Participants should decide whether to accept or reject such a self-benefiting division. In the non-risk condition, an absolutely fair redivision of money would take place if participants reject self-benefiting division (e.g. 5:5 or 6:4). By contrast, in the risk condition, other-benefiting redivision of money (e.g., 1:9 or 2:8) would take place if participants rejected the self-benefiting division. Results involving 40 college students showed the main effect of condition. The frequency of accepting self-benefiting division in the risk condition was higher than that in the non-risk condition. As such, compliance with social norms is based on the preservation of material resources. In Study 2, we used economic or moral rewards to compensate for economic loss following compliance with the norm. Results involving 28 college students revealed a significant effect of compensation. The rewards, including moral praise, effectively decreased selfish choices. These findings extend previous studies on social norm compliance by emphasizing the importance of internal, fairness-based balance between material and moral needs, as well as the role of moral praise in promoting prosocial behavior. (shrink)

Psychological studies have long demonstrated effects of expectations on judgment, whereby the provision of information, either implicitly or explicitly, prior to an experience or decision can exert a substantial influence on the observed behavior. This study extended these expectation effects to the domain of interactive economic decision-making. Prior to playing a commonly-used bargaining task, the Ultimatum Game, participants were primed to expect offers that would be either relatively fair or unfair. A third group played the Game without receiving any (...) prior information about expected offers. As predicted, these expectations had a large effect on decisions made by participants in the Ultimatum Game, with those with expectations of fairness rejecting significantly more unfair offers than those participants who expected low offers. Implications for models of fairness and equity are discussed. (shrink)

Experimental results in Ultimatum, Trust and Social Dilemma games have been interpreted as showing that individuals are, by and large, not driven by selfish motives. But we do not need experiments to know that. In our view, what the experiments show is that the typical economic auxiliary hypothesis of non-tuism should not be generalized to other contexts. Indeed, we know that when the experimental situation is framed as a market interaction, participants will be more inclined to keep more money, (...) share less, and disregard other participants’ welfare [Hoffman et al., 1994]. When the same game is framed as a fair division one, participants overall show a much greater concern for the other parties’ interests. The data thus indicate that the context of an interaction is of paramount importance in eliciting different motives. The challenge then is to model utility functions that are general enough to subsume a variety of motives and specific enough to allow for meaningful, interesting predictions to be made. For the sake of simplicity (and brevity), in what follows we will concentrate upon the results of experiments that show what appears to be individuals’ disposition to behave in a fair manner in a variety of circumstances [Camerer, 2003]., though what we are saying can be easily applied to other research areas. Such experimental results have been variously interpreted, each interpretation being accompanied by a specific utility function. We shall consider three such functions and the underlying interpretations that support them, and assess each one on the basis of what they claim to be able to explain and predict. (shrink)

Studies in economic decision-making have demonstrated that individuals appreciate social values supporting equity and disapprove unfairness when distributing goods between two or more parties. However, this seems to critically depend on psychological mechanisms partly pertaining to the ingroup–outgroup distinction. Little is known as to what extent economic bargaining can be manipulated by means of psychological interventions such has hypnosis. Here we show that a hypnotic ingroup versus outgroup suggestion impacts the tolerance of unfairness in an Ultimatum Game. Specifically, the (...) ingroup suggestion was associated with significantly greater acceptance rates of unfair offers than the outgroup suggestion, whereas hypnosis alone exerted only small effects on unfairness tolerance. These findings indicate that psychological interventions such as hypnotic suggestion can contribute to ingroup favoritism and outgroup rejection. (shrink)

The current research investigated the role of gratitude in economic decisions about offers that vary in fairness yet benefit both parties if accepted. Participants completed a trait/dispositional gratitude measure and then were randomly assigned to recall either an event that made them feel grateful or the events of a typical day. After the gratitude induction task, participants played the ultimatum game, deciding whether to accept or reject fair offers and unfair offers from different proposers. Results showed that trait gratitude (...) was positively correlated with respondents’ acceptance of unfair offers. However, experimentally induced momentary gratitude did not influence acceptance of unfair offers. The trait or disposition to be grateful involves the enduring capacity across different types of situations and benefactors to see the good that is present, even when that benefit is small. Accordingly, dispositional gratitude – but not momentarily induced gratitude – was associated with a greater propensity to accept even the small benefits within unfair offers which otherwise pose barriers to making the effective economic decision of accepting offers regardless of their relative size. (shrink)

Aspiration-based evolutionary dynamics have recently been used to model the evolution of fair play in the ultimatum game showing that incredible threats to reject low offers persist in equilibrium. We focus on two extensions of this analysis: we experimentally test whether assumptions about agent motivations (aspiration levels) and the structure of the game (binary strategy space) reflect actual play, and we examine the problematic assumption embedded in the standard replicator dynamic that unhappy agents who switch strategies may return to (...) a rejected strategy without exploring other options. We find that the resulting “no switchback” dynamic predicts the evolution of play better than the standard dynamic and that aspirations are a significant motivator for our participants. In the process, we also construct and analyze a variant of the ultimatum game in which players can adopt conditional (on their induced aspirations) strategies. (shrink)

This translated work is an example of the type of writing that characterized the radical school of Hegelianism in the late 1830s and 1840s in that it mirrors the arguments and irritable temper of both the liberal Hegelians and their conservative opponents during the period between the French Revolution of 1830 and the general revolutions of 1848. As such, it is a useful period piece that can enhance an appreciation of the Hegelian involvement in the theological and philosophical argumentation that (...) characterized the German Vorm rz.". (shrink)