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Adam Oliver (LSE): “Getting What They Deserve: Bricks, Screws and the Ultimatum Game”
9 October 2019, 4:30 pm – 6:00 pm
Abstract: The ultimatum game was developed to help identify the fundamental motivators of human behaviour, typically by asking participants to share a windfall endowment with an anonymous responder. Common observation is that proposers offer, and responders refuse to accept, a much larger share of the endowment than is predicted by rational choice theory. However, in the real world, windfall money is rare, and thus external validity would instead require the use of earned income. This article reports tests of the ultimatum game over earned endowments and finds that the shares that proposers offer and responders accept are significantly lower than that observed with windfall money, moving the overall outcome somewhat closer to the subgame-perfect equilibrium. Moreover, the shares offered by proposers and accepted by responders are significantly lower when the task undertaken to earn the endowment is relatively mundane rather than creative. Finally, the results suggest that offers in the ultimatum game over earned endowments are driven by strategic self-interest rather than a concern with the final distribution of outcomes (assuming that the responder has done nothing), and that an important driver of the participants’ responses appears to be the notion of desert.
Adam Oliver is an Associate Professor in LSE’s Department of Social Policy.