Impact of social affinity on altruism: Experimental evidence from the Ultimatum Game

Purpose - The objective of the study is to evaluate the impact of social affinity on the strategic choices made by economic agents using the framework of Ultimatum Game. Conventional theory underpinning the Ultimatum Game predicts the complete absence of altruistic behaviour wherein the agents are expected to maximise individual monetary payoffs of the agents. The authors' experimental findings disprove this assumption of purely self-interested behaviour of the agents as proposed by orthodox neo-classical utility maximisation model. Design/methodology/approach - The final outcome of the Ultimatum Game is mutually dependent on the agent's strategic choices, i.e. the proposer's altruistic concern towards the responder and their expectation of altruistic concern by the responder. In this study, the authors evaluate the participant's strategic choice under three levels of partner selection arrangements – (1) stranger, (2) face-to-face interface with a peer and (3) friend. Findings - From the experimental results, the authors found that the proposers reflected greater degree of altruism towards proposers' partners and also expected greater degree of altruism to be reciprocated by proposers' partners. The proposers were voluntarily willing to offer fair share to proposers' socially close partners and also increasingly expected that the proposers would be willing to accept unfair offers. Research limitations/implications - The study stresses that the ignorance of the human capacity for altruism runs the serious risk of legitimising narrow-minded selfishness and failure in recognising the capacity for public spiritedness which can distort the range and choice of optimum policy prescriptions. This requires policy makers to adopt a more holistic and less-pessimistic view of human nature. Originality/value - The authors study offers a novel experimental framework that provides insights on how increase in social affinity can influence both altruistic behaviour and altruistic expectations of the participants, highlighting the inadequacy of the neo-classical maximisation hypothesis predicated on all agents. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-07-2022-0481.