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The role of role uncertainty in modified dictator games

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  • Nagore Iriberri
  • Pedro Rey-Biel

Abstract

We compare behavior in modified dictator games with and without role uncertainty. Subjects choose between a selfish action, a costly surplus creating action (altruistic behavior) and a costly surplus destroying action (spiteful behavior). While costly surplus creating actions are the most frequent under role uncertainty (64%), selfish actions become the most frequent without role uncertainty (69%). Also, the frequency of surplus destroying choices is negligible with role uncertainty (1%) but not so without it (11%). A classification of subjects into four different types of interdependent preferences (Selfish, Social Welfare maximizing, Inequity Averse and Competitive) shows that the use of role uncertainty overestimates the prevalence of Social Welfare maximizing preferences in the subject population (from 74% with role uncertainty to 21% without it) and underestimates Selfish and Inequity Averse preferences. An additional treatment, in which subjects undertake an understanding test before participating in the experiment with role uncertainty, shows that the vast majority of subjects (93%) correctly understand the payoff mechanism with role uncertainty, but yet surplus creating actions were most frequent. Our results warn against the use of role uncertainty in experiments that aim to measure the prevalence of interdependent preferences.
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Suggested Citation

  • Nagore Iriberri & Pedro Rey-Biel, 2011. "The role of role uncertainty in modified dictator games," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 160-180, May.
  • Handle: RePEc:kap:expeco:v:14:y:2011:i:2:p:160-180
    DOI: 10.1007/s10683-010-9261-5
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    More about this item

    Keywords

    Role uncertainty; Role reversal; Interdependent preferences; Social welfare maximizing; Inequity aversion; Mixture-of-types models; Strategy method; Experiments; C72; C91; D81;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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