Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7352960 | Games and Economic Behavior | 2018 | 13 Pages |
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.
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Authors
Vernon L. Smith, Bart J. Wilson,