The Indirect Evolutionary Approach to Explaining Fair Allocations
Experimental results on the ultimatum game show clearly that (1) large fractions of players offer a 'fair' allocation and (2) that unfair (but positive) offers are systematically rejected. We offer an explanation of this behavior using the 'indirect evolutionary approach' which is based on the assumption that players behave rationally for given preferences but that their preferences change through an evolutionary process. We prove that despite anonymous interaction a preference for punishing unfair offers is an evolutionarily successful strategy if players interact in small groups. This leads players to split the resource equally almost always. However, the equal split is not due to 'true fairness' (or 'altruism') but is entirely caused by the (justified) fear that unfair offers might be rejected.
|Date of creation:||31 Jul 1995|
|Date of revision:||27 Aug 1998|
|Note:||This is the final version forthcoming in "Games and Economic Behavior"|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- R. Cressman, K.H. Schlag, 1995.
"The Dynamic (In)Stability of Backwards Induction,"
Discussion Paper Serie B
347, University of Bonn, Germany.
- Steffen Huck & Georg Kirchsteiger & Joerg Oechssler, 1997.
"Learning to Like What You Have - Explaining the Endowment Effect,"
Game Theory and Information
9702001, EconWPA, revised 15 May 1997.
- Steffen Huck & Georg Kirchsteiger & Jörg Oechssler, 2005. "Learning to like what you have - explaining the endowment effect," Economic Journal, Royal Economic Society, vol. 115(505), pages 689-702, 07.
- Steffen Huck & Georg Kirchsteiger & Jörg Oechssler, 2003. "Learning to Like What You Have - Explaining the Endowment Effect," Bonn Econ Discussion Papers bgse5_2003, University of Bonn, Germany.
- Huck, Steffen & Kirchsteiger, Georg & Oechssler, Jörg, 1997. "Learning to like what you have: Explaining the endowment effect," SFB 373 Discussion Papers 1997,38, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Thaler, Richard H, 1988. "The Ultimatum Game," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 195-206, Fall.
- Georg Kirchsteiger, 1994.
"The role of envy in ultimatum games,"
ULB Institutional Repository
2013/5925, ULB -- Universite Libre de Bruxelles.
- Samuelson, Larry & Zhang, Jianbo, 1992. "Evolutionary stability in asymmetric games," Journal of Economic Theory, Elsevier, vol. 57(2), pages 363-391, August.
- Noeldecke,Georg & Samuelson,Larry, .
"An evolutionary analysis of backward and forward induction,"
Discussion Paper Serie B
228, University of Bonn, Germany.
- Noldeke Georg & Samuelson Larry, 1993. "An Evolutionary Analysis of Backward and Forward Induction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 425-454, July.
- G. Noldeke & L. Samuelson, 2010. "An Evolutionary Analysis of Backward and Forward Induction," Levine's Working Paper Archive 538, David K. Levine.
- Gary E Bolton & Rami Zuwick, 2010.
"Anonymity versus punishments in ultimatum bargaining,"
Levine's Working Paper Archive
826, David K. Levine.
- Bolton Gary E. & Zwick Rami, 1995. "Anonymity versus Punishment in Ultimatum Bargaining," Games and Economic Behavior, Elsevier, vol. 10(1), pages 95-121, July.
- Prasnikar, Vesna & Roth, Alvin E, 1992.
"Considerations of Fairness and Strategy: Experimental Data from Sequential Games,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(3), pages 865-88, August.
- V. Prasnikar & A. Roth, 1998. "Considerations of fairness and strategy: experimental data from sequential games," Levine's Working Paper Archive 451, David K. Levine.
- Samuelson, L. & Zhang, J., 1991.
"Evolutionary Stability in Asymmetric Games,"
9132, Tilburg - Center for Economic Research.
- Harrison, Glenn W & McCabe, Kevin A, 1996. "Expectations and Fairness in a Simple Bargaining Experiment," International Journal of Game Theory, Springer, vol. 25(3), pages 303-27.
- Becker, Gary S, 1976. "Altruism, Egoism, and Genetic Fitness: Economics and Sociobiology," Journal of Economic Literature, American Economic Association, vol. 14(3), pages 817-26, September.
- Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-66, May.
- Gale, John & Binmore, Kenneth G. & Samuelson, Larry, 1995. "Learning to be imperfect: The ultimatum game," Games and Economic Behavior, Elsevier, vol. 8(1), pages 56-90.
- Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
- Bolton, Gary E, 1991.
"A Comparative Model of Bargaining: Theory and Evidence,"
American Economic Review,
American Economic Association, vol. 81(5), pages 1096-136, December.
- G. Bolton, 2010. "A comparative model of bargaining: theory and evidence," Levine's Working Paper Archive 263, David K. Levine.
- Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:9507001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.