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The Indirect Evolutionary Approach to Explaining Fair Allocations

Author

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  • Steffen Huck

    (Humboldt University, Berlin, oechsler@wiwi.hu-berlin.de)

  • Joerg Oechssler

    (Humboldt University, Berlin, oechsler@wiwi.hu-berlin.de)

Abstract

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.

Suggested Citation

  • Steffen Huck & Joerg Oechssler, 1995. "The Indirect Evolutionary Approach to Explaining Fair Allocations," Game Theory and Information 9507001, University Library of Munich, Germany, revised 27 Aug 1998.
  • Handle: RePEc:wpa:wuwpga:9507001
    Note: This is the final version forthcoming in "Games and Economic Behavior"
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    References listed on IDEAS

    as
    1. Samuelson, L., 1989. "Evolutionnary Stability In Asymmetric Games," Papers 11-8-2, Pennsylvania State - Department of Economics.
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    More about this item

    Keywords

    evolutionary game theory; ultimatum game; punishment.;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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