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The role of role uncertainty in modified dictator games

  • Nagore Iriberri
  • Pedro Rey-Biel

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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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1147.

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Date of creation: May 2008
Date of revision: Apr 2010
Handle: RePEc:upf:upfgen:1147
Contact details of provider: Web page: http://www.econ.upf.edu/

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  13. Nagore Iriberri & Pedro Rey-Biel, 2008. "Elicited beliefs and social information in modified dictator games: What do dictators believe other dictators do?," Economics Working Papers 1137, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2009.
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