Numerosity and allocation behavior: Insights using the dictator game

Abstract

This paper investigates how the numerosity bias influences individuals’ allocation of resources between themselves and others, using the backdrop of the traditional dictator game. Across four studies including both hypothetical and real exchanges of money, we show that the form of the numerical value representing the quantity of the resource (e.g., $20 vs 2000 cents) systematically biases the decision-maker to perceive the quantity s/he is thinking of allocating as being “less than adequate” or “more than adequate”. Essentially, such a biased perception of adequacy with respect to the quantity of the resource consequently influences the decision-maker’s final allocation decision. We attribute this systematic bias to the “numerosity” of the resource. We find that bigger numerical values representing quantity (e.g., 2000 cents) bias decision-makers to over-infer the quantity, thus inducing them to allocate less to the entities they are focusing on.