Ultimatum Game

Split 10 dollars with a stranger. They can accept your offer, or turn it down so that you both get nothing. What would you offer, and what would you accept?

Here is how a purely self-interested person would play. As the responder, they accept any offer above zero, because a little money beats none. So, as the proposer, they offer the smallest amount possible. If people only cared about their own money, that is what we would see.

It isn't. Werner Güth and his colleagues published the first ultimatum game experiment in 1982, and a large literature has followed. Across dozens of experiments in several countries, proposers offer 40–50% of the money on average, and offers of 20% or less are turned down about half the time. People pay real money to punish a split they see as unfair, and proposers expect that.

The dictator gameremoves the responder's veto: the proposer simply decides the split. Many people still give something away, though usually less than in the ultimatum game (Forsythe and others, 1994). And when researchers, mostly anthropologists, ran these games in 15 small-scale societies, offers varied a lot from place to place, but in no society did behaviour match the purely self-interested prediction: even the stingiest groups offered more than a quarter of the money on average (Henrich and others, 2001).

The game

Your partners are simulated. They accept or reject at rates loosely modelled on published results.

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Sources

Güth, W., Schmittberger, R., and Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior and Organization, 3(4), 367–388. Link

Camerer, C. F. (2003). Behavioral Game Theory: Experiments in Strategic Interaction. Princeton University Press. Link

Forsythe, R., Horowitz, J. L., Savin, N. E., and Sefton, M. (1994). Fairness in simple bargaining experiments. Games and Economic Behavior, 6(3), 347–369. Link

Henrich, J., and others (2001). In search of Homo economicus: behavioral experiments in 15 small-scale societies. American Economic Review, 91(2), 73–78. Link