Article ID Journal Published Year Pages File Type
7352960 Games and Economic Behavior 2018 13 Pages PDF
Abstract
An exceptionally robust result in experimental economics is the failure to observe equilibrium (subgame perfect) play in the ultimatum game. A heretofore unnoticed feature of the game is that neither player voluntarily chooses to play. Motivated by Adam Smith's proposition that beneficence-like that of non-equilibrium play in the ultimatum game-cannot be extorted by force, we offer the responder the opportunity to opt out of the game for a mere $1 payoff for both players. We observe far higher rates of equilibrium play, including highly unequal splits, than heretofore reported in binary choice versions of the game.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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