Designing an Experiment to Isolate Motivations
In an economic bargaining game, a 'Proposer' offers to split a sum of money with a 'Responder'. If the Responder accepts, they both get the proposed split; if the Responder rejects, both get nothing. An initial study finds that Responders from a close-knit, rural community are significantly more likely to reject low offers (less than 30% of the total sum) than Responders who are university students from a large, anonymous urban environment.
Two competing hypotheses emerge to explain this difference:
- The rural Responders have a stronger innate preference for fairness.
- The rural Responders fear social disapproval or damage to their reputation within their community if they are seen accepting an unfair offer.
Design a follow-up experiment that could help determine which of these two hypotheses is a better explanation for the observed behavior. Describe your experimental modification and explain how the results would allow you to distinguish between the 'preference for fairness' and 'fear of social disapproval' motivations.
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Economy
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CORE Econ
Introduction to Microeconomics Course
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Figure 4.17: Responder Acceptance Rates in the Kenyan/US Ultimatum Game