Title: Social versus Moral preferences in the Ultimatum Game: A theoretical model and an experiment,
Abstract: In the Ultimatum Game (UG) one player, named "proposer", has to decide how to
allocate a certain amount of money between herself and a "responder". If the
offer is greater than or equal to the responder's minimum acceptable offer
(MAO), then the money is split as proposed, otherwise, neither the proposer nor
the responder get anything. The UG has intrigued generations of behavioral
scientists because people in experiments blatantly violate the equilibrium
predictions that self-interested proposers offer the minimum available non-zero
amount, and self-interested responders accept. Why are these predictions
violated? Previous research has mainly focused on the role of social
preferences. Little is known about the role of general moral preferences for
doing the right thing, preferences that have been shown to play a major role in
other social interactions (e.g., Dictator Game and Prisoner's Dilemma). Here I
develop a theoretical model and an experiment designed to pit social
preferences against moral preferences. I find that, although people recognize
that offering half and rejecting low offers are the morally right things to do,
moral preferences have no causal impact on UG behavior. The experimental data
are indeed well fit by a model according to which: (i) high UG offers are
motivated by inequity aversion and, to a lesser extent, self-interest; (ii)
high MAOs are motivated by inequity aversion.