A Cross-Cultural Look at The Ultimatum Game

As we discussed in class, the previous school of thought regarding economic behavior and more specifically, behavior involving the ultimatum game rests on the notion that both players in the Ultimatum game are bound to act rationally and the outcome will be such that the proposer will have all but the smallest positive integer value they can offer to their opponent. This article set out to prove whether or not this economic behavior is the same across different cultures, and what other factors may be affecting the decisions of the players in these types of games. One thing that they found during this experiment was that those people in highly industrialized were less likely to play the game according to the predictions but rather, were much more likely to offer somewhere close to 50%, and just like we had discussed in class regarding the spite factor, many of these same subjects rejected offers if they were anything less than 20% of the total sum and the same findings seemed to be true for subjects of similar experiments from all around the world.

The main purpose of this study was to observe the behavioral differences of the Machiguenga (a small village in Peru), to the findings in similar Ultimatum games results. The experiment found that the Machiguenga accepted offers at around 26% of the whole, or a little less than half of the typical experimental findings.  The author points out that during post experimental discussion he noticed that the Machiguenga often saw their outcome differently than there American counterparts and welcomed any amount of money no matter how small and attributed their lower payoff to bad luck that were not chosen as the proposer. The one thing from this experiment that I think could skew the results is the way the subjects view their payoffs economically. The experimenter states that the amount of money he offered is equal to a certain amount of the subjects’ wages. I believe that the American subjects would be more likely to consider anything less than half unfair because they directly associate that amount of money with money they would expect to receive from work. The difference would then lie in the author’s language, where the wages of the LA subjects were a lot more set, the wages for the work that the Machiguenga sounds as if it isn’t so steady as the author refers to it as “occasional” work. I’m just going to go out on a limb and say that anyway who is dependent on “occasional work” for a livable wage is going to welcome any amount of money regardless of how small and likely without complaint. Though I feel there are a few shortcomings to the experiments accuracy I find them interesting nonetheless.

http://www2.psych.ubc.ca/~henrich/Website/Papers/ult.pdf

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2 thoughts on “A Cross-Cultural Look at The Ultimatum Game”

  1. This study is interesting because it attempts to imply that the concept of ‘fairness’ is not innate but simply a Western value. It would seem that a small, close-knit community like this one in Peru would operate on a system of sharing and equity, but it seems that the offer of money is overwhelms that. The most significant error to this approach, obviously, is that he offered the subjects a sum worth several days wages. If he had run the same game on Americans with proportionately similar sums of money, hit outcomes may have been different. The first player would likely become more greedy and the second one would, probably, be less likely to give up this still large sum of cash in the idea of ‘spite.’ The idea of spite can only be carried so far; even Americans live in a world of inequality and very few reject that wages they are able to make, even if their peers make more, out of spite.

  2. this is extremely interesting, as an African American studies major as well as Econ I am often frustrated at the lack of economic thinking that comes from my Af Am work it would be interesting to see how this game is played across different worldviews

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