Social Distance and Other-Regarding Behavior in Dictator Games

Abstract

In this chapter, we ask if instructional and procedural manipulation can be used in a systematic way to understand the social norms that have been said to be the cause of deviations from game theoretic predictions in dictator and other games. We find that such manipulations, intended to affect subjects' degree of social distance from the experimenter and assumed to affect expectations of reciprocity, play a key role in determining and understanding behavior. Dictator games with and without monetary rewards have been compared by Forsythe et al. (1994; hereafter FHSS). In this game, a subject and his or her anonymous counterpart in another room “has been provisionally allocated” $10. The subject's task is to decide how to “divide” the $10; the counterpart has no recourse but must accept the allocation. These phrases appearing in quotation marks constitute the exact language that appears in the instructions to the subjects. As we shall see, this language is not entirely benign. It was first used by Kahneman et al. (1986, pp. 105–6; hereafter KKT); and FHSS desired to stay close to this originating study to examine its replicability and the effect of reward variations in this version of the game. Dictator games are an interesting vehicle for studying the meaning and interpretation of fairness. The dictator game controls for strategic behavior in the ultimatum game where the fairness interpretation first emerged prominently. In the ultimatum game, player 1 offers any amount of the $10 to player 2. If player 2 accepts, the $10 is divided according to the terms of the offer; if player 2 rejects, each player gets 0.