Monetary Stakes and Socioeconomic Characteristics in Ultimatum Games: An Experiment with Nation-Wide Representative Subjects

Games: An Experiment with Nation-Wide Representative Subjects Tsu-Tan Fu Center for Survey Research and Institute of Economics, Academia Sinica, Nankang, Taipei 115, Taiwan Wei-Hsin Kong Institute of Industrial Economics, National Central University C.C. Yang* Institute of Economics, Academia Sinica, Nankang, Taipei 115, Taiwan Department of Public Finance, National Chengchi University, Wenshan, Taipei 116, Taiwan June 2007 [Abstract] We conduct an experiment on ultimatum games with subjects who are representative of a nation. Our focus is on the size effect of monetary stakes when experimental subjects are “real” people rather than students as in previous studies. It is found that: (i) raising stakes substantially reduce the number of “outliners” in both offers and rejections; (ii) higher stakes exert a significant impact on players’ offer and rejection behavior as the standard economic theory predicts even for inexperienced or one-shot play; (iii) socioeconomic characteristics dominate responders’ behavior when stakes are low, whereas monetary stakes dominates responders’ behavior when stakes are high; (iv) age has a lifecycle effect on players’ behavior when stakes are low: those subjects who are young and old offer less and reject less often than those who are in the middle age; and (v) women reject less often than men, but there is no gender difference in offer behavior.