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Cooperation in Single Play, Two-Person Extensive form Games between Anonymously Matched Players

  • Kevin McCabe
  • Mary Rigdon
  • Vernon Smith
Chapter

Abstract

Experimentalists have long observed that many subjects in two-person extensive form games choose cooperative strategies even when they will be played only once matched with another person whose identity will never be revealed to them.1 This phenomenon has been observed most prominently, and replicated many times, in the large literature on ultimatum (and dictator) games, beginning with Güth, Schmittberger and Schwartz (1982). In the ultimatum game two anonymously paired subjects split k units of money. Player 1 proposes a split of x for Player 2 and k−x for Player 1. If Player 2 accepts, the money is split as proposed; if rejected, each gets zero. The modal outcome in these experiments is for Player 1 to offer half of the pie represented by k units of money; the mean offer is about 0.47k. Players 2 rarely reject offers as high as x = 0.4k and regularly reject offers of 0.1k, 0.2k and even 0.3k, where k = $10 2. These results are little changed when the stakes are greatly increased to k = $100 (Hoffutan, McCabe and Smith, 1996). Yet game theory predicts that Player 1 will offer the minimum unit of account, say $1, when k consists of 10 one-dollar bills, and Player 2 will accept.

Keywords

Ultimatum Game Dictator Game Trust Game Inequity Aversion Single Play 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Kevin McCabe
    • 1
  • Mary Rigdon
    • 1
  • Vernon Smith
    • 1
  1. 1.George Mason UniversityUSA

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