Ultimatum Game Behavior in a Social-Preferences Vacuum Chamber
25 Pages Posted: 3 Sep 2021
Date Written: 2021
Abstract
We study strategic interaction in an experimental social-preferences vacuum chamber. We mute social preferences by letting participants knowingly interact with computers. Our new design allows for indirect strategic interaction: there are several waves in which computer players inherit the behavior of human players from the previous wave. We apply our method to investigate trembling-hand perfection in a normal-form version of the ultimatum game. We find that behavior remains far off from a trembling-hand perfect equilibrium under selfish preferences even towards the end of our experiment. The likely reasons for our findings are strategic uncertainty and incomplete learning.
Keywords: social preferences, induced-value theory, learning, ultimatum game, strategic interaction
JEL Classification: C920, C720, D910
Suggested Citation: Suggested Citation