A Resource-Rational Process Model of Fairness in the Ultimatum Game

AbstractWidely regarded as the cornerstone of justice (Rawls, 1971), fairness constitutes one of the pillars of human morality. The Ultimatum Game (UG), extensively studied in behavioral economics, is the canonical task for studying fairness. In sharp contrast to the predictions of normative standards in game theory, people typically reject low offers in UG. In this work, we present the first resource-rational process model of UG. Concretely, by taking into account people’s expectations, we show that Nobandegani et al.'s (2018) resource-rational process model, sample-based expected-utility, provides a unified account of several experimental findings in UG, namely, the effects of expectation, competition, and time pressure. Assuming that expectation serves as a reference point for subjective valuation of an offer, we show that the rejection of low offers in UG can arise from purely self-interested expected-utility maximization. We conclude by discussing the implication of our work for moral decision-making and, more broadly, human rationality.

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