An example of the Ultimatum Game

 

In philosophy and the social sciences, both theoretical treatises and empirical research have reached the conclusion that fairness and justice are what have enabled human beings to transcend smaller communities based on genetic connections, moving forward to large-scale, cooperative societies. It was the establishment and maintenance of fair and just institutions that laid the bridge by which our ancestors were able to cross from prehistoric civilization into a new era of rapid economic, cultural and societal development. Although fairness and justice are abstract concepts which, just as they vary between different traditions, have varied over different historical periods—continuously evolving as humanity has developed, humans’ appeal to fairness and justice nevertheless shares certain common roots with cognition and social evolution.

 

What is called the Ultimatum Game is often played in experimental economics in order to examine how fairness factors into cognition and behavioral response patterns. The rules are simple: two players are given a sum of money;  player one decides how to divide the money, and player two can either accept player one’s proposal, or reject it, in which case neither player gains anything and the game is over.

 

In experimental situations, the game is typically played once between two players who do not know each other and likely will never meet again after the game. From the perspective of rational self-interest, as long as player two gains any share of the money, he or she should accept—any gain is better than receiving nothing. Likewise, from a purely rational perspective, player one should give player two as little as possible so as to maximize his or her own profit.

 

However, experimental results are widely divergent from rational expectations. It seems that people have an intuitive sense of how to balance unexpected profit with fairness. If player one’s proposal does not reach a certain level of fairness, player two will often give up his or her own opportunity to gain much more benefits rather than give way to an unexpected proposal.

 

The Third-party Dictator Game, derived from the Ultimatum Game, has enabled experimental economists and researchers in other fields to examine people’s sense of distributive justice when they have no stake in the distribution. The game proceeds normally, except rather than player two being able to reject player one’s proposal, a third party receives half of the sum player one is initially allotted and can decide either to accept player one’s apportionment and keep the sum, or spend his or her sum in order to punish player one if he or she feels the distribution is not fair.

 

A vast amount of experimental evidence demonstrate that people generally have a cognitive sense of equality in distributions and emotional reactions to unequal distributions; people show a strong willingness to punish others who violate their sense of fairness and justice, even when the punishment comes at their own expense. A recent study on primate behavior, found that gorillas, humans’ closest living relatives, also showed perceptions of equality in distribution. In a modified version of the Ultimatum Game, gorilla two (the recipient) responded to unfair distributions from gorilla one by braying and spitting, or even refusing to cooperate. The gorillas’ behavioral patterns—an inclination to sacrifice any personal gains rather than let distributor get away with a perceived injustice—is mirrored by the behavior of children between ages two to seven in the same scenario. Fearing that the recipient may reject an unfair proposal, the distributing gorillas tended to choose relatively fair distributions.

 

Although willingness to punish inequality is universal among humans, research has also shown that cognitive perception of unfair distribution varies widely across different societies. Scholars have noted that the establishment of fair social norms and just systems is pivotal to the construction and maintenance of a harmonious society, and that punitive behaviors to perceived injustice, such as noncooperation or altruistic punishment (punitive behaviors at one’s own expense), function to safeguard societyal fairness and justice by curtailing the ability to benefit unfairly, including illuminating free riders.

 

The theoretical work and experimental studies on distributive justice provides real insight for improving social fairness and justice in modern China, working toward a harmonious society. First of all, humans innately perceive and appeal to fairness and justice, psychological hardwiring that has a basis in social evolution. Secondly, in order to maintain fairness and justice, people will take a loss to punish others when they perceive social inequality.  This paints a picture of the human psyche that is very different from the homo economicus (“economic human”) model often assumed in economics and other social sciences, suggesting that this over-simplified benchmark should not be the foundation from which theories on social norms and social systems are drawn. Likewise, in practice, we should avoid encouraging unscrupulous behavior by promulgating this model as a standard representation of human behavior.

 

 

Zhu Jing is from the Institute of Logic and Cognition and the Department of Philosophy at Sun Yat-Sen University.

 

The Chinese version appeared in Chinese Social Sciences Today, No. 475, Jul. 15, 2013

 

                                                                                                                           Translated by Zhang Mengying

Revised by Charles Horne

The Chinese link:

http://www.csstoday.net/xueshuzixun/guoneixinwen/82330.html