Cultural Differences in Ultimatum Game Experiments
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.371.9978&rep=rep1&type=pdf
Large numbers of economic researches show that people typically do not behave as selfish as traditional economics assume. The ultimatum game we talked about in class provides convincing evidence in this perspective. The result of the game illustrates how tastes for fairness and the anticipation that small offers may be turned down affect decision making. But are the results of ultimatum games similar regardless of other factors, such as gender, age and cultural background? Substantial differences of results were observed across countries. For example, the offers in US are higher than those in Japan, where in turn the offers are higher in Israel. An experimental research conducted in 2003 also dived deep into the influence of cultural difference on variations in average offered and rejection rates.
However, the approach adopted in most cross-culture studies has two potential drawbacks. One is that data from only one city of each country are included in the studies. Confounding variables exist and may influence the result on some degree. For example, if the within country differences are of the same magnitude as the between country differences, it would be unreasonable to attribute differences between subject pools to cultural differences. The other drawback is the lack of details on cultural traits that underlie differences in subjects’ behavior.
As a result, firstly, more than one city of each country has been studied in the new experiment. Secondly, the information on countries’ cultural traits from ultimatum games is enhanced. Two essential trait dimensions are examined: power distance, which is defined as “the extent to which the less powerful members of institutions within a country expect and accept that power is distributed unequally” and individualism, “the ties between individuals are loose in societies”. These two trait dimensions are extracted from the work of Hofstede and Inglehart, who are two leading scholars studying national culture differences in their relation to organizational practices.