Durk Pearson & Sandy Shaw’s®
Life Extension NewsTM
Volume 16 No. 3 • March 2013


Rejection of “Unfair” Offers May Not
Represent a Preference for “Fairness” (Equality)

The ultimatum game has become a highly studied model for human behavior that has been widely interpreted to mean that humans prefer “fairness” (roughly close to a 50:50 division of money between the two players), so much so that they are willing to forego some money if the division deviates from a roughly 50:50 split.*


* The ultimatum game is an economic game played by two players. The proposer has a sum of money (supplied by the researchers) which he/she can divide as he/she chooses into two shares, one he/she proposes to keep while the other share is offered to the second player, the responder. If the responder accepts the offer, they split the money as agreed. If the responder rejects the offer as too low (or “unfair”), neither the proposer nor responder get to keep any of the money.


Now, a new paper1 has appeared that comes to a different interpretation of the rejection of “unfair” offers that occur in the ultimatum game. The new interpretation involved running some other games with slightly different rules to see whether the results are consistent with the view that the ultimatum game supports a strong reciprocity model of cooperation where individuals punish noncooperators (those who keep an “unfairly” large share of the money for themselves), even though it means giving up the share offered to them (less than 50% of the divided sum of money).

As the authors explain, “a strong reciprocator is defined as an individual who is willing to ‘sacrifice resources for rewarding fair and punishing unfair behavior EVEN IF THIS IS COSTLY [TO THEM] AND PROVIDES NEITHER PRESENT NOR FUTURE MATERIAL REWARDS FOR THE RECIPROCATOR.” “In other words, strong reciprocators reciprocate both positively AND negatively — positive reciprocity promotes cooperation, and negative reciprocity stabilizes it.”1 “The rejection of unfair offers that is frequently observed in UG [ultimatum game] experiments has been regarded as evidence of strong reciprocity that is driven by a preference for reciprocal fairness and inequity aversion on the part of the responder.”1

The researchers tested this hypothesis by comparing the results of the UG to other social preference games. For example, the impunity game is similar to the UG, but a responder who rejects an offer as “unfair” gets to keep no part of the offered split (eg., the responder gets $0 if he/she rejects the offer as unfair, same as in the UG) but the proposer gets to keep the entire amount of money he proposed as his/her share. The decision of the responder has no effect on how much money the proposer gets, unlike in the UG, where the rejection of the offer as unfair by the responder means that neither the responder nor the proposer get anything. Yet, responders in the impunity game still rejected 30–40% of the “unfair” offers (about half of the responders reject offers in which they would receive less than 30% of the total sum). This is not consistent with the usual interpretation that the rejection of “unfair” offers represents a form of negative reciprocity, since rejection of the “unfair” offer does not “punish” the proposer who makes the “unfair” offer. The responder loses by rejecting a possible share of the divided money but gets no reward by punishing the proposer.

Instead, the researchers propose that the rejection of unfair offers in the ultimatum game is the responder’s way of rejecting the imposition of an inferior status or a “wounded pride hypothesis” as it has been described in an earlier paper.

We note that the proposed interpretation may or may not be the correct one, but there can be no doubt that the widely held belief that the rejection of “unfair” offers represents a form of strong reciprocity cannot be correct.

Perhaps what is needed is a game designed to test whether the rejection of “unfair” offers represents a negative emotional response to reduced status. How about a game with the same rules as the ultimatum game and when the offer is accepted, both parties get their agreed upon split, but the proposer has to pay a “tax” of 15% to a third party, while the responder has to pay a “tax” of 5% to that third party. The offer began as a “fair” offer (since it was accepted by both proposer and responder), but does it remain “fair” with the split altered by the imposed (and unequal) taxes? Could a new rule of the game be added to allow the proposer and responder an option to “punish” the tax collector that would restore “fairness” to the arrangement?

Reference

1. Yamagishi et al. Rejection of unfair offers in the ultimatum game is no evidence of strong reciprocity. Proc Nat Acad Sci USA. 109(50):20364-8 (2012).

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