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Equilibrium Play in Voluntary Ultimatum Games: Beneficence Cannot Be Extorted

Author

Listed:
  • Vernon L. Smith

    (Economic Science Institute and Smith Institute for Political Economy and Philosophy)

  • Bart J. Wilson

    (Economic Science Institute and Smith Institute for Political Economy and Philosophy)

Abstract

One robust result in experimental economics is the failure to observe equilibrium play in the ultimatum game. A heretofore unnoticed feature of the game is that neither player voluntarily chooses to play the game. 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 high rates of equilibrium play with highly unequal splits when responders choose to play such ultimatum games with both fixed and variable sums.

Suggested Citation

  • Vernon L. Smith & Bart J. Wilson, 2017. "Equilibrium Play in Voluntary Ultimatum Games: Beneficence Cannot Be Extorted," Working Papers 17-17, Chapman University, Economic Science Institute.
  • Handle: RePEc:chu:wpaper:17-17
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    6. Vernon L. Smith, 2020. "Causal versus Consequential Motives in Mental Models of Agent Social and Economic Action: Experiments, and the Neoclassical Diversion in Economics," Kyklos, Wiley Blackwell, vol. 73(3), pages 341-370, August.
    7. Vernon L. Smith, 2018. "Adam Smith, scientist and evolutionist: modelling other-regarding behavior without social preferences," Journal of Bioeconomics, Springer, vol. 20(1), pages 7-21, April.

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    More about this item

    Keywords

    ultimatum games; voluntary play; Adam Smith; experimental economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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