Players are placed in pairs. One player (the dictator, called the divider in the instructions) chooses how to split a sum of money between herself and her match. The players then receive the payoff specified by the split.
Dividers choosing to give the other player more than zero is consistent with other-regarding preferences (e.g. altruism).
The default parameters (a one-shot decision to split $100) will satisfy a majority of instructors. As dictators can only choose integer splits, an instructor may want to avoid small values for the amount to be split (Total Pie).
We recommend a one-period game (Periods=1).1. Under the assumptions that a player gains utility only from her own payoff and monotonicity, the dictator will give nothing to the other player. While you will certainly have students who give nothing, it is not uncommon for a majority to give something, with many splitting the sum evenly.
While giving more than zero is consistent with altruism (i.e., the dictator values the well being of her match) or inequality aversion, there are alternative explanations. For example, choosing the greediest action may cause disutility,2 or a player might be concerned with what the instructor thinks of him.3
Making player 2 human and less statistical will likely increase giving. This can be done by allowing Chat.
The Dictator game can be paired with other games to get a sharper picture of other-regarding preferences. For example, giving in the Ultimatum game may stem from both altruistic and strategic concerns. Splits in the Dictator game will likely be lower than splits in the Ultimatum game, giving a measure of strategic concerns in the Ultimatum game. Likewise, a second mover in the Trust game who returns money to the first mover may be motivated by positive reciprocity (repaying a kind action), as well as altruism. The difference between giving by Dictators and the amount returned by second movers in a Trust game thus gives a measure of positive reciprocity.
The results will demonstrate the extent to which players deviate from the theoretical benchmark of no giving.
The table (Figure 1) summarizes dictator choices, showing the mean and mode amount allocated to the non-dictator (i.e., the offer).
The frequency chart (Figure 2) gives the distribution of allocations to player 2, displaying for each bin the frequency with which those allocations were chosen.
There are no robots! If you check All Play Only Robots, or Add Robots to an incomplete group, the student player is always the dictator.