Investigating the Social Boundaries of Fairness by Modeling Ultimatum Game Responders’ Decisions with Multinomial Processing Tree Models

Marco Biella (), Max Hennig and Laura Oswald
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Marco Biella: Faculty of Business and Economics, University of Basel, 4052 Basel, Switzerland
Max Hennig: Department of Psychology, Julius-Maximilians-Universität Wuerzburg, 97070 Würzburg, Germany
Laura Oswald: Department of Psychology, Albert-Ludwigs-Universität Freiburg, 79104 Freiburg im Breisgau, Germany

Games, 2025, vol. 16, issue 1, 1-21

Abstract: Fairness in competitive games such as the Ultimatum Game is often defined theoretically. According to some of the literature, in which fairness is determined only based on resource allocation, a proposal splitting resources evenly (i.e., 5:5) is generally assumed as fair, and minimal deviation (i.e., 4:6) is considered enough to classify the proposal as unfair. Relying on multinomial processing tree models (MPTs), we investigated where the boundaries of fairness are located in the eye of responders, and pit fairness against relative and absolute gain maximization principles. The MPT models we developed and validated allowed us to separate three individual processes driving responses in the standard and Third-Party Ultimatum Game. The results show that, from the responder’s perspective, the boundaries of fairness encompass proposals splitting resources in a perfectly even way and include uneven proposals with minimal deviance (4:6 and 6:4). Moreover, the results show that, in the context of Third-Party Ultimatum Games, the responder must not be indifferent between favoring the proposer and the receiver, demonstrating a boundary condition of the developed model. If the responder is perfectly indifferent, absolute and relative gain maximization are theoretically unidentifiable. This theoretical and practical constraint limits the scope of our theory, which does not apply in the case of a perfectly indifferent decision-maker.

Keywords: fairness; competitive games; Ultimatum Game; multinomial processing tree; relative gain maximization; utility theory (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2025
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