Equality, Participation, Transition: Essays in Honour of Branko Horvat

Samuel Bowles and Herbert Gintis 41
nothing.’ If both proposer and respondent were Homo economicus in
this game, the proposer would offer the respondent one cent, and the
respondent would accept, the proposer walking away with $19.99. In
fact, as dozens of replications of this experiment have documented,
under varying conditions and with varying amounts of money, proposers
commonly offer the respondent very substantial amounts, and
respondents frequently reject offers that are below one-third of the
total. 12 Similar results have occurred in experiments with stakes as high
as three months’ earnings. 13
When asked why they offer more than one cent, proposers commonly
say that they are afraid that respondents will consider low offers
unfair and reject them as a way to punish proposers’ unfairness. When
respondents reject offers, they give virtually the same reasons for their
actions. The proposers’ actions might be explained by selfish motives
but the respondents’ cannot, and, possibly anticipating the desire of
the respondent to punish offers considered to be unfair, the proposer
makes a substantial offer. The experimental evidence gives additional
support to this interpretation. Thus Roth et al. (1991) conducted ultimatum
games in four different countries (United States, Yugoslavia, Japan,
and Israel), and found that while the level of offers differed in different
countries, the probability of an offer being rejected did not. This indicates
that both proposers and respondents share the same notion of
what is considered ‘fair’ in that society. In fact, evidence from dictator
games indicates that proposers also may act out of fairness motives. In
the dictator game, the proposer offers a split of the money and the
respondent has no choice but to accept. While proposers could keep
all the money themselves, they typically offer respondents a considerable
share of the total (Forsythe et al., 1994; Hoffman, McCabe and
Smith, 1996b).
A remarkable aspect of these experiments – and one very germane to
our concern with redistributive policy – is the degree to which behaviours
are affected by the experimentally contrived social relationship
between players. Communication among participants prior to the game,
or experimental conditions that reduce the subjective ‘social distance’
among participants, lead to higher and more sustained levels of generosity
and cooperation. 14 For example, subjects facing a prisoner’s dilemma
pay-off structure tended nonetheless to cooperate rather than defect
when they were matched with fraternity brothers, but to defect when
they were informed that their partner was a police officer (Kollock, 1997).
Eckel and Grossman (1997) found that proposers in a dictator game gave
more when told that the respondent was the Red Cross, rather than