By David Butler
Experimental games allow social scientists measure whether economic actors are willing to forgo their own self-interest to punish others.The most widely used set of games are called ‘dictator games’ where one person is given a monetary endowment, which they can allocate between themselves and another player, the recipient, who has no control over the decision. What these experiments measure is whether one individual has a concern for another individuals material interests even though the recipient cannot influence the outcome.
It has been found that ‘dictators’ usually split the monetary endownment equally or keep it all for themselves, with some offers ranging between 0% and 50%. The allocation however can depend on whether participants are familiar with one another, whether they know they are playing a dictator game and how the game is described to them.
There are many deviations on this game, most famously the ultimatum game, where one participant splits a monetary endowment between two players and the recipient can either accept or reject the offer. If the recipient rejects the offer, both parties walk away empty handed. Rejected offers are viewed as evidence of negative reciprocity as recipients show a preference to punish those who act unfairly. The rejection of low offers is often viewed as an emotional rather than logicial decision.
An interesting natural experiment occurred last season at the end of a Tottenham match (that can be viewed here) that should be of interest to behavioural economists who think about such games. Brad Friedel the Tottenham goalkeeper throws his shirt into the crowd and two Tottenham fans attempt to claim ownership after catching it together. One man eventually gives up on the tug-of-war and afterwards rejects a monetary offer from the 'winner'.
Experimental games allow social scientists measure whether economic actors are willing to forgo their own self-interest to punish others.The most widely used set of games are called ‘dictator games’ where one person is given a monetary endowment, which they can allocate between themselves and another player, the recipient, who has no control over the decision. What these experiments measure is whether one individual has a concern for another individuals material interests even though the recipient cannot influence the outcome.
It has been found that ‘dictators’ usually split the monetary endownment equally or keep it all for themselves, with some offers ranging between 0% and 50%. The allocation however can depend on whether participants are familiar with one another, whether they know they are playing a dictator game and how the game is described to them.
There are many deviations on this game, most famously the ultimatum game, where one participant splits a monetary endowment between two players and the recipient can either accept or reject the offer. If the recipient rejects the offer, both parties walk away empty handed. Rejected offers are viewed as evidence of negative reciprocity as recipients show a preference to punish those who act unfairly. The rejection of low offers is often viewed as an emotional rather than logicial decision.
An interesting natural experiment occurred last season at the end of a Tottenham match (that can be viewed here) that should be of interest to behavioural economists who think about such games. Brad Friedel the Tottenham goalkeeper throws his shirt into the crowd and two Tottenham fans attempt to claim ownership after catching it together. One man eventually gives up on the tug-of-war and afterwards rejects a monetary offer from the 'winner'.
There’s some very interesting questions to be asked here, most notably why did the ‘participant’, who eventually lost out, refuse to accept the offer of cash afterwards? It was a zero-sum, once-off game after all.
Perhaps the decision to reject the offer was 'rational' in the sense that the loser put a greater value on his self-worth. Would he have rejected an offer of £100 after losing out?
While it is clear that both parties are communicating during the interaction, why did they not negotiate over price then, when they both had a hold over the shirt?
Was the shirt sought after becuase it was free or was it as psychologist Paul Bloom claims here, that the origins of the good reflected the value placed on it by both parties? After all, it was not just a Tottenham shirt, it was Brad Friedel’s Tottenham shirt.That said, the origins of the good did not seem to follow through in the winning participants offer. Perhaps the winner deemed this offer as compensation as opposed to a trade for ownership of the shirt.
I have more questions than answers about this situation but it’s probably the closest I’ve seen to a ‘natural’ bilateral experimental game, like the ones spoken of above, where decision making of fans (like most during football matches!) is very much a product of emotions.
Perhaps the decision to reject the offer was 'rational' in the sense that the loser put a greater value on his self-worth. Would he have rejected an offer of £100 after losing out?
While it is clear that both parties are communicating during the interaction, why did they not negotiate over price then, when they both had a hold over the shirt?
Was the shirt sought after becuase it was free or was it as psychologist Paul Bloom claims here, that the origins of the good reflected the value placed on it by both parties? After all, it was not just a Tottenham shirt, it was Brad Friedel’s Tottenham shirt.That said, the origins of the good did not seem to follow through in the winning participants offer. Perhaps the winner deemed this offer as compensation as opposed to a trade for ownership of the shirt.
I have more questions than answers about this situation but it’s probably the closest I’ve seen to a ‘natural’ bilateral experimental game, like the ones spoken of above, where decision making of fans (like most during football matches!) is very much a product of emotions.
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