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A Kuhn-Tucker Model for Behaviour in Dictator Games

Author

Listed:
  • Peter G Moffatt

    (School of Economics and CBESS, University of East Anglia, Norwich.)

  • Graciela Zevallos-Porles

    (School of International Development and CBESS, University of East Angle, Norwich.)

Abstract

We consider data from a dictator game experiment in which each dictator is repeatedly exposed to two different treatments: a Giving treatment in which the amount given to the recipient is constrained to be non-negative; and a Taking treatment in which the amount taken from the recipient is constrained to be non-negative. Another key design feature is that the price of transferring is varied between tasks. The data is used to estimate the parameters of a Stone-Geary utility function over own-payoff and other’spayoff. Between-subject heterogeneity is assumed in one of the selfishness parameters. The econometric model incorporates zero observations (e.g. zero-giving or zero-taking) by applying a version of the Kuhn-Tucker theorem and treating zeros as corner solutions in the Dictator’s constrained optimisation problem. The method of maximum simulated likelihood (MSL) is used for estimation. We find that the average dictator exhibits a strong degree of selfishness in the sense of having a high subsistence level for own payoff. However, once this basic need is met, dictators appear willing to share the remaining endowment equally. Above all, we find that selfishness is lower in taking tasks than in giving tasks, and we attribute this difference to the "cold prickle of taking".

Suggested Citation

  • Peter G Moffatt & Graciela Zevallos-Porles, 2020. "A Kuhn-Tucker Model for Behaviour in Dictator Games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 20-03, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:wcbess:20-03
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    References listed on IDEAS

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    More about this item

    Keywords

    Dictator games; Taking games; Kuhn-Tucker conditions; Experimetrics.;
    All these keywords.

    JEL classification:

    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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