The proportion offered in the Dictator and Ultimatum games decreases with crowd and social distance (2023)


Two-person economic games are widely used in experimental and behavioral economics to test predictions of economic theories and gain insight into factors that influence people's decisions in everyday social interactions (Camerer et al., 2011). Two economic games, the dictator game and the ultimatum game, have received considerable attention as tests of normative economic theory, particularly as a means of examining the potential role of self-interest and altruism in economic decision-making (for a review see Camerer, 2003). These two games also have real world applications (e.g. contract negotiations). In the Dictator game, a first player (the "Proposer") is given an amount of money and can offer a second player (the "Responder") as much or as little of that amount and keep what is left. The responder has no say in this matter. The ultimatum game is similar except that the responder has the option to accept or decline the proposer's offer. If the offer is accepted, both players will receive the agreed amounts; however, if the offer is declined, both players receive nothing.

Normative economic theory predicts that in a non-repeated game, 'rational' providers will offer the responder the smallest amount possible no matter what form of the game is being played, and that in the ultimatum game the 'rational' respondent should always accept the offer . However, participants typically do not act as the theory predicts. Rather, providers often offer significantly more than the forecast minimum amount. Average bids in the dictator game are around 20% of the starting amount (Oxoby and Spraggon, 2008), and mean bids in the ultimatum game are typically between 30 and 40% of the starting amount, with the most common bid being a 50–50 split (Camerer and Thaler , 1995). Respondents in the ultimatum game also behave “irrationally” from the perspective of normative theory, typically rejecting offers that are less than 20% of the original amount (Camerer and Thaler, 1995).

One suggestion as to why more than the minimum is offered in both games, and why responders often reject an offer in the ultimatum game, is that proposers and responders are both influenced by the perceived fairness of the offer. That is, providers may offer more than the minimum predicted by normative theory because they think the minimum offer would be unfair, and responders may reject such offers for the same reason. Consistent with this interpretation, providers offer less and responders are willing to accept less if the provider has done something to either earn the original amount of money or to earn being in the provider's role (Hoffman et al., 1994). However, fairness alone cannot explain why observed offers are consistently larger than predicted. If fairness alone were the reason, then providers in both the Dictator and Ultimatum games should offer equivalent amounts, while in the Dictator game providers actually offer a significantly lower percentage (e.g. Forsythe et al., 1994). This difference in the bids between the two games is believed to be because in the ultimatum game, the providers consider that if their bid is judged too low by the responder, they risk being rejected, and they would in that case received nothing (Roth, 1995).

Of course, even in simple situations, economic behavior can have multiple determinants, and behavioral economics research in other areas suggests other possible determinants that still need to be explored in depth. For example, few studies have examined whether magnitude effects occur in ultimatum and dictator game situations, but such effects are known to be extremely robust in other choice situations where behavior poses challenges to normative theory. For example, size effects have been studied extensively in other behavioral economics experiments, perhaps most notably those on intertemporal choice, where the observed shapes of discounting curves clearly violate the stationarity hypothesis of discounted utility theory (Koopmans, 1960, Koopmans et al., 1964). More specifically, the discount rate (that is, the rate at which the value of a delayed reward is discounted as the waiting time to receive that reward increases) is greater for smaller amounts of delayed reward than for larger amounts (for reviews, see Frederick et al., 2002; Green and Myerson, 2004). However, to date there has been relatively little research that systematically examines the effect of the initial amount of money given to the proposer on the percentage offered to the responder in dictator or ultimatum games.

In a meta-analysis examining a variety of different potential predictors of offers in dictator game experiments conducted for a variety of different purposes, Engel (2011) reported that there was no impact of the initial amount on the share offered in the dictator game studies. However, when the analysis was restricted to studies using more than one starting amount, there was evidence of a very small effect of size, with dictators offering a smaller share when the stakes were higher. However, the range over which the amounts varied was fairly limited, with the highest initial amount being US$130, and further research examining the effect of the initial amount over a much larger range is clearly needed.

Regarding the ultimatum game, Forsythe et al. (1994) compared offers in the ultimatum game when bidders were given either $5 or $10 in real money and found no significant difference in the fraction offered. Hoffmann et al. (1996) were concerned that the non-normative behavior typically observed was an artifact of the small stakes involved, and therefore gave applicants an initial amount of either $10 or $100 and reported no significant difference in the percentage offered. The usual finding is still that providers offer around 30-40% of the original amount, regardless of what that amount was (i.e. there is no size effect), but as mentioned earlier, the original amount has rarely been systematically varied.

A recent study in India (Andersen et al., 2011) reported a strong effect on vendor behavior (the percentage offered decreased as the initial amount increased). Participants received real money for their participation and initial amounts ranged from 20 to 20,000 rupees, with the highest stake condition being around a year's wages on site. However, the main focus of the study was on respondent behavior and providers were given specific instructions to evoke low bids to increase the likelihood of rejections. As a result, it is unclear whether the size effect observed in this study was due to the particular instructions, the relatively high stakes in terms of local wages, or the special population studied (villagers in rural India). It is particularly unclear because a study in Indonesia comparing low and high stakes, again relative to local wages, found no difference in the median share offered (Cameron, 1999). Therefore, the question of whether there is an order-of-magnitude effect in the ultimatum game, such that the portion offered varies systematically with the initial amount, remains unresolved, and accordingly the present study was designed to answer this question.

Another interesting variable that can affect the percentage of the initial amount offered is the social distance between proposer and responder. Previous research in behavioral economics under this rubric has focused on the level of anonymity of the proposer and responder (eg, Charness and Gneezy, 2008; Hoffman et al., 1996). Although this research may have important implications for theories of reciprocal altruism and hypotheses about the role of expected social consequences in economic decision-making, there is another aspect of social distance that is more in line with what is usually meant by this term outside of economics. This means that social distance often simply refers to how close one person feels to another, in addition to the degree of social isolation in the sense of freedom from feedback. In a series of studies, Rachlin and Jones, 2008a, Rachlin and Jones, 2008b, Jones and Rachlin, 2006, participants imagined that they had made a list of the 100 people closest to them in the world, starting with from their dearest friend or relative at position #1 to a mere acquaintance at #100. Rachlin and Jones, 2008a, Rachlin and Jones, 2008b showed that the amount of money a participant would give up in order to give money to another person varies inversely with the social distance between them.

Rachlin and Jones (2010) describe a study that examined offers in both the Ultimatum and Dictator games, where the range of amounts varied from $10 to $100,000 and social distance from 1 to 100. They report that the percentage of amenities initially offered decreased as crowds and social distance increased. The study used a between-group design for the crowd and a student sample. The present study examines the effect of social distancing, as defined by Rachlin and Jones, on offerings in both the Dictator and Ultimatum games, using a broad sample of participants recruited by MTurk rather than the more typical sample of college students. Furthermore, unlike the study reported by Rachlin and Jones, the present study varied the amount within participants, used more participants per condition, and varied the amount over an even larger range.

The dictator and ultimatum games are often thought to model economic decision-making in social situations outside of the laboratory. Many types of negotiation can be viewed as an analogy to the ultimatum game, where one person makes an offer that another person either accepts or rejects, but if the offer is not accepted, both may get nothing. The dictator game offers a way of determining the offeror's behavior when he would not have to reckon with the possibility of a refusal, which can then be compared to the behavior in the ultimatum game. While actual negotiations often take the form of repetitive games, the dictator and ultimatum games deal with the important first step in such negotiations. The amounts of money involved can range from relatively small (e.g. at flea markets) to extremely large (e.g. buying a house) and can take place between people who don't know each other at all as well as between close ones Relatives. This study examines the role these factors play in determining initial offers. Finally, because the participants in the present study were extremely diverse, we were also able to examine applicant behavior in the Dictator and Ultimatum games as a function of demographic factors: age, gender, education, and household income.

section cutouts


201 participants were recruited for the Dictator Game through the Amazon Mechanical Turk (MTurk) participant pool, and another 193 participants were recruited for the Ultimatum Game in the same way. Participants had to live in the United States and have an MTurk-designated Human Intelligence Task (HIT) approval rating of at least 85% to preview the experiment (i.e., potential participants had to have completed 85% of their previous ones). MTurk HITs in a way


The results for the Dictator game are presented in the left panel of Figure 1, which shows the mean fraction of the initial amount offered as a function of the initial amount and respondent's social distance. As can be seen, there was a clear size effect: providers offered a significantly smaller share as the initial amount of money increased,F(2, 199)=69,24,P<.001,DieP2=.410. Offers made when the initial amount was $10 averaged 24.1% (SD = 19.0), while offers


The present study addressed two questions relevant to both the Dictator and Ultimate games: whether the initial amount provided to the proposer affects the share offered to the respondent, and how the amount offered proportion is influenced by the social distance between the proposer and the responder. The answers to these questions relate directly to the role of fairness, altruism and reciprocity in the proposer's decisions (for an overview see Fehr and Schmidt, 2006).


This manuscript is based on the Dissertation Dissertation submitted by Chris Bechler of the Department of Economics at Washington University, which received the 2013 Omicron Delta Epsilon Frank W. Taussig Award for the best undergraduate or recent article in economics. We thank Dr. Dorothy Petersen and Bruce Petersen from the Economics Department for their encouragement and valuable comments.

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Does proportion offered in the dictator and ultimatum games decrease with amount and social distance? ›

Proportion of initial amount offered decreased as social distance increased. Amount offered was consistently higher in the Ultimatum than the Dictator Game. The results extend knowledge of the determinants of behavior in economic games.

How is the dictator game different than the ultimatum game? ›

The Ultimatum game (see Figure Box 11.2) is identical to the Dictator game except that the recipient can reject the proposed allocation (Güth et al., 1982). If she rejects it, both players receive nothing.

How is the dictator game different from the ultimatum game quizlet? ›

The ultimatum game has the proposer making a take-it-or-leave-it offer to the responder. If the responder accepts the offer is carried out. If the responder rejects then both players receive zero. The dictator game removes the responder's option to reject an offer.

What is dictator game in game theory? ›

Definition. The dictator game is an experimental paradigm in which one participant (the dictator) receives an endowment and then decides to what extent she/he wants to split this endowment with another, anonymous participant (the recipient).

What is the ultimatum and dictator game? ›

The ultimatum (UG) and dictator (DG) games are two tasks where a sum of money has to be divided between two players: a proposer and a receiver. Following the rational choice theory, proposers should offer the minimum in the UG and nothing in the DG, due to the presence/absence of the receivers' bargaining power.

Do video games increase social interaction? ›

Studies have found that playing video games, especially those that are social and collaborative, can lead to more prosocial behaviors (behavior that is positive, helpful, and aimed toward social acceptance and friendship) among children.

What is the ultimatum game game theory? ›

The Ultimatum Game is a paradigmatic two-player game. A proposer can offer a certain fraction of some valuable good. A responder can accept the offer or reject it, implying that the two players receive nothing. The only subgame-perfect Nash equilibrium is to only offer an infinitesimal amount and to accept this.

What are the results of the dictator game? ›

The clearest conclusion to draw from the results of the dictator game is that there exists some motive for human actions other than self-interest.

What does the ultimatum game prove? ›

The ultimatum game is important from a sociological perspective, because it illustrates the human unwillingness to accept injustice. The tendency to refuse small offers may also be seen as relevant to the concept of honour.

Why might the multiple play ultimatum game have a different result than the single play ultimatum game? ›

Why might the multiple-play ultimatum game have a different result than the single-play ultimatum game? The multiple-play ultimatum game allows for players to send signals. Therefore, the receiver can punish a player who doesn't share enough.

What is The Ultimatum game and how does it reflect the role of fairness? ›

Experimentally, fairness can be studied using the Ultimatum Game, where the decision to reject a low, but non-zero offer is seen as a way to punish the other player for an unacceptable offer. The canonical explanation of such behavior is inequity aversion: people prefer equal outcomes over personal gains.

Who has the power in an ultimatum game? ›

The proposer has arguably more power than the receiver because the proposer has a good chance of going home with more money than the receiver (e.g., a $6 to $4 split is rarely vetoed). Within the proposer's role, trust and power go together at the time the offer is made.

What is the dictator game quizlet? ›

A dictator game is where there are two players, A and B: A is the dictator. Player A is endowed with the stake ($100, say), and then gets to choose how much of that stake (anywhere from $0 to$100, inclusive) to give to Player B, and then that division takes place. Player B has no active role in a dictator game.

What are the variations of dictator game? ›

There are two different types of dictator games used in the experiment: 'take' games and 'give' games.

What is the game theory concept? ›

Game theory studies interactive decision-making, where the outcome for each participant or "player" depends on the actions of all. If you are a player in such a game, when choosing your course of action or "strategy" you must take into account the choices of others.

Do video games decrease social skills? ›

Poor social skills

If you play video games too much, you can stop paying attention to your social skills. Developing social skills is one of the most important things you can do in life, but when you spend the entire day in front of a screen, you have few chances to hone that skill.

Do video games make people less social? ›

Earlier research has found possible negative effects of video games to include less time spent with friends and social difficulties among adolescents and young adults. Conversely, some research has evidence of positive effects if video games are played with real-life friends or on-ine acquaintances.

Do video games influence social behavior? ›

Overall, the content of a video game has an effect on whether negative or positive effects on the player's social behavior are to be expected. Whereas violent video games increase aggression and decrease prosocial behavior, prosocial video games lead to the opposite effects.

What is an example of the ultimatum game in economics? ›

A canonical example is the Ultimatum Game: one player proposes a division of a sum of money between herself and a second player, who either accepts or rejects. Based on rational self-interest, responders should accept any nonzero offer and proposers should offer the smallest possible amount.

How do you play the ultimatum game? ›

In the simplest form of the ultimatum game, a proposer decides how much of $10 to give a responder, and the responder decides whether to accept or reject the offer. If the responder accepts, the players split the money in the way the proposer suggested. If the responder rejects, neither player gets any money.

What was the purpose of a dictator? ›

Dictators usually resort to force or fraud to gain despotic political power, which they maintain through the use of intimidation, terror, and the suppression of basic civil liberties. They may also employ techniques of mass propaganda in order to sustain their public support.

What does a dictator have control over? ›

Power is enforced through a steadfast collaboration between the government and a highly developed ideology. A totalitarian government has "total control of mass communications and social and economic organizations".

What is the outcome of a prisoners dilemma game with a Nash equilibrium ________? ›

The likely outcome for a prisoner's dilemma is that both players defect (i.e., behave selfishly), leading to suboptimal outcomes for both. This is also the Nash Equilibrium, a decision-making theorem within game theory that states a player can achieve the desired outcome by not deviating from their initial strategy.

What were the results of the prisoner's dilemma experiment? ›

It turns out that, unlike game theorists, prisoners don't betray one another. In fact, they betray one another far less than college students do. The students only cooperated 37 percent of the time, while the prisoners stuck together 56 percent of the time.

What is fair game and unfair game in game theory? ›

A game which is not biased toward any player. A game in which a given player can always win by playing correctly is therefore called an unfair game.

Who has bargaining power in dictator game? ›

The dictator game is a derivative of the ultimatum game, in which one player (the proposer) provides a one-time offer to the other (the responder). The responder can choose to either accept or reject the proposer's bid, but rejecting the bid would result in both players receiving a payoff of 0.

Who sleeps together in The Ultimatum? ›

At one point, Jake said that if he had to make a decision there and then, he would leave with Rae and not April. However, he and April later reunited, with the pair revealing they'd slept together.

What is the optimal play in the ultimatum game quizlet? ›

What is the optimal play in the ultimatum​ game? The optimal play in the ultimatum game is for the allocator to propose a division of the money such that the recipient receives ​$ 0.01 and the recipient then. accepts. the division.

Which of the following best describes dictatorship? ›

dictatorship, form of government in which one person or a small group possesses absolute power without effective constitutional limitations.

What best describes a dictator? ›

A dictator is someone who has absolute power — or who at least behaves as if they do by bossing others around. In government, a dictator is a ruler who has total control over a country, with no checks or balances to prevent abuse of power. Dictator can also describe someone who acts like that on a smaller scale.

Do dictator games measure altruism? ›

Altruism has been measured in the lab with dictator games. In a standard dicta- tor game (Forsythe et al., 1994), each subject is assigned a role as either a dictator or a recipient. Each dictator then makes a single decision, allocating a fixed amount between himself and an anonymous other.

What is the dictator a parody of? ›

The Great Dictator, Charlie Chaplin's 1940 satire of German dictator Adolf Hitler.

What is the main purpose of the games theory approach? ›

The intention of game theory is to produce optimal decision-making of independent and competing actors in a strategic setting. Using game theory, real-world scenarios for such situations as pricing competition and product releases (and many more) can be laid out and their outcomes predicted.

What is the impact of game theory? ›

Game theory is a framework for understanding choice in situations among competing players. Game theory can help players reach optimal decision-making when confronted by independent and competing actors in a strategic setting.

What is a game theory argument? ›

Game theory is the study of the ways in which interacting choices of economic agents produce outcomes with respect to the preferences (or utilities) of those agents, where the outcomes in question might have been intended by none of the agents.

Does how we measure altruism matter playing both roles in dictator games? ›

We find that playing both roles in dictator games appears to reduce altruistic behavior and increase sensitivity to the relative price of giving.

How does video games affect social behavior? ›

The social consequences of gaming addiction can be devastating. It can put a huge strain on relationships with family members and friends. Lying about the amount of time spent gaming and neglecting others to play video games compulsively can cause conflict, confrontation and even marriage breakdowns.

How does game theory affect the economy? ›

Game theory turned attention away from steady-state equilibrium toward the market process. Economists often use game theory to understand oligopoly firm behavior. It helps to predict likely outcomes when firms engage in certain behaviors, such as price-fixing and collusion.

What effects do video games have on society as a whole? ›

According to many studies, video games can increase aggressive behavior, cause emotional outbursts and decrease inhibitions in many people (Kardaras 2008). As a result of the increased exposure to this modern phenomenon, a mounting body of research is linking video games to violent, aggressive and anti-social behavior.

How does game theory explain altruism? ›

The rationale of evolutionary game theory explicates that animals/organisms act altruistically because they expect reciprocal altruism, in which the benefits they provide to others will be returned to them in the future.

Why altruism is more important to leaders than followers? ›

Altruism in a leader improves effectiveness and increases feelings of team cohesiveness. Researchers from the University of Nebraska-Lincoln found that altruism accompanied by social astuteness (similar to self-awareness) improved leadership effectiveness.

What are the social issues of gaming? ›

While video games have many positive aspects, there are a number of issues that are associated with this highly interactive form of entertainment.
  • Excessive Playing. ...
  • Violence. ...
  • Gender Stereotyping. ...
  • Racial Stereotyping.

Do video games cause social isolation? ›

This creates an overdependence on gaming as a form of social relief. In the long run, these social behaviors affect the brain development, thus leading to increased need for isolation due to a resultant social anxiety disorder or social phobia.

What does the game theory economics explain? ›

Game theory is the study of the ways in which interacting choices of economic agents produce outcomes with respect to the preferences (or utilities) of those agents, where the outcomes in question might have been intended by none of the agents.

What is an example of game theory in economics? ›

The prisoner's dilemma is a classic example of game theory.

If they both confess, they get 5 years each. However, if one confesses to the crime and betrays the other, then the one who confesses is given immunity for giving information. But the other who remained silent gets 20 years.

What is game theory economics quizlet? ›

Game theory. Game theory: The study of how people make decisions in situations in which attaining their goals depends on their interactions with others; in economics, the study of the decisions of firms in industries where the profits of a firm depend on its interactions with other firms.

Do video games have a positive effect on society? ›

The most notable positive effects of gaming include:

Improved problem-solving skills and logic. Increased hand-to-eye coordination. Greater multi-tasking ability. Faster and more accurate decision-making.

How video games are affecting people? ›

Gaming has also been associated with sleep deprivation, insomnia and circadian rhythm disorders, depression, aggression, and anxiety, though more studies are needed to establish the validity and the strength of these connections.

What impact does video games have on people? ›

Many psychologists and scientists believe that playing video games offers some benefits, particularly by teaching higher-level and abstract thinking skills. Playing video games changes the brain's physical structure, similar to the way the brain changes when a person learns to play the piano or read a map.


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