Equilibrium play in voluntary ultimatum games: Beneficence cannot be extorted
Vernon Smith and
Bart Wilson ()
Games and Economic Behavior, 2018, vol. 109, issue C, 452-464
An exceptionally robust result in experimental economics is the failure to observe equilibrium (subgame perfect) play in the ultimatum game. A heretofore unnoticed feature of the game is that neither player voluntarily chooses to play. Motivated by Adam Smith's proposition that beneficence—like that of non-equilibrium play in the ultimatum game—cannot be extorted by force, we offer the responder the opportunity to opt out of the game for a mere $1 payoff for both players. We observe far higher rates of equilibrium play, including highly unequal splits, than heretofore reported in binary choice versions of the game.
Keywords: Ultimatum games; Voluntary play; Adam Smith; Experimental economics (search for similar items in EconPapers)
JEL-codes: C91 (search for similar items in EconPapers)
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Working Paper: Equilibrium Play in Voluntary Ultimatum Games: Beneficence Cannot Be Extorted (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:109:y:2018:i:c:p:452-464
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