|By:||Chaning Jang (Department of Psychology, Princeton University)
John Lynham (Department of Economics & UHERO, University of Hawaii at Manoa; Center for Ocean Solutions, Stanford University)
Where do preferences for fairness come from? We use a unique field setting to test for a spillover of sharing norms from the workplace to a laboratory experiment. Fishermen working in teams receive random income shocks (catching fish) that they must regularly divide among themselves. We demonstrate a clear correlation between sharing norms in the field and sharing norms in the lab. Furthermore, the spillover effect is stronger for fishermen who have been exposed to a sharing norm for longer, suggesting that our findings are not driven by selection effects. Our results are consistent with the hypothesis that work environments shape social preferences.
|Keywords:||ultimatum game; social preferences; fairness; workplace spillovers|
|JEL:||Q2 C9 C7 B4 D1|
Group formation is a fundamental activity in human society. Humans often exclude others from a group and divide the group benefit in a fair way only among group members. Such an allocation is called in-group fair. Does natural selection favor an in-group fair allocation? We investigate the evolution of fairness and group formation in a three-person Ultimatum Game (UG) in which the group value depends on its size. In a stochastic model of the frequency-dependent Moran process, natural selection favors the formation of a two-person subgroup in the low mutation limit if its group value exceeds a high proportion (0.7) of that of the largest group. Stochastic evolutionary game theory provides theoretical support to explain the behavior of human subjects in economic experiments of a three-person UG.
|By:||Lora R. Todorova (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
This paper experimentally examines the relationship between self-reporting risk preferences and behavioral choices in the subsequently played dictator, ultimatum and investment games. The results from these experiments are used to discern the motivational bases of behavioral choices in the ultimatum and investment games. The focus is on investigating whether strategic considerations are important for strategy selection in the two games. We find that self-reporting risk preferences does not alter the dictators’ offers and trusters’ investments, while it significantly decreases the proposers’ offers and leads to a substantial decrease in the amount trustees give back to their partners. We interpret these results as evidence that the decisions of proposers in the ultimatum game and trustees in the investment game are strategic.
|Keywords:||coordination game, dictator game, ultimatum game, investment game, questionnaire, risk scale, risk preferences|
Werner Güth∗, and Reinhard Tietz (1990) “Ultimatum bargaining behavior:: A survey and comparison of experimental results." Journal of Economic Psychology, Volume 11, Issue 3, September 1990, Pages 417–449. DOI: http://dx.doi.org/10.1016/0167-4870(90)90021-Z. (PDF from EconPaper)
==notes by yinung==
In an ultimatum bargaining game players 1 and 2 can distribute a positive amount of money in the following way: first, player 1 determines his demand which player 2 can then either accept or induce conflict, i.e. player 2 faces the ultimatum either to accept player 1’s proposal or to have no agreement at all. Experimentally observed ultimatum bargaining decisions with amounts ranging from 0.50 to 100 German marks are statistically analysed. The demands of player 1 are compared with the acceptance behavior of player 2 with the help of consistency tests in which a subject has to decide in the position of both players. Finally, we consider ultimatum bargaining games with more than just one round where, except for the final round, nonacceptance does not cause conflict but another round of ultimatum bargaining for a smaller cake.