The Respective Effects of Being Observed and Sanctioned in Modified Dictator and Ultimatum Games

Abstract

We experiment within a laboratory the respective effects of being observed and sanctioned in both a dictator and an ultimatum game. We obtain the classical results that individuals do not play the subgame perfect equilibria. We also show that being observed increases the offers made by the proposer in the dictator game but this effect is difficult to identify in the ultimatum game. We also find that in the dictator game, the more the individuals are sensitive to observation the less they are to sanction.