Windfall Scale, Wealth Consciousness and Social Proximity as Influences on Ultimatum Game Decisions

Abstract

—The ultimatum game is a construct used to explore factors that influence decision making in economic reasoning. The game involves two players who asymmetrically encounter a windfall, but both knowing the amount of the windfall: one player proposes a division of the windfall between the two players; the other player either accepts the proposer’s suggested division, and in this case the windfall is divided between the players according to the proposal, even if the responder receives nothing, or the other player rejects the proposer’s offer, and in this case neither player receives anything. In this paper, influences on decisions to accept or reject offers within the ultimatum game (scale of windfall, wealth consciousness, and social proximity) are explored. Scale of windfall did not reveal an effect. Aspects of responders’ socio-economic circumstances likely to associate with greater concern about finances, and therefore greater wealth consciousness, are shown to relate to a higher threshold for a minimum acceptable offer. Greater social distance between proposer and responder appears to increase rejection rates. These results demonstrate an influence of social and economic circumstances of participants on their economic reasoning.