Investigating Motives Behind Punishment and Sacrifice: A Within-Subject Analysis

Abstract

We analyse an experiment that observes each subject's behaviour for both roles in the ultimatum and dictator game, and two modified ultimatum games where in the event of a decline the proposer and responder receive a λ- and (1-λ)-share of their proposed payoffs, respectively, where in our games λ=1 (impunity game) and λ=0 (guarantor game). It is shown that inequality aversion or self-interest cannot describe the behaviour of over 60% of subjects across a number of roles given reasonable levels of error, because many subjects sacrifice material payoffs without a pecuniary punishment motive and some punish when the proposal is not unfavourable to them. The within-subject analysis suggests that many of the former may be motivated by a willingness to avoid 'unfair' bargains whereas a proportion of the latter may be motivated by spite.

Keywords: ultimatum bargaining, inequality aversion, other-regarding preferences

JEL Classification: C72, C91