The effect of high stakes on fairness concerns; Evidence from Mongolia PDF Л.Эсмэдэх

Abstract

The paper investigates the effect of high stakes on fairness concerns in experimental economics. Using data from experiments involving the Sequential Prisoner’s Dilemma Game in Mongolia, we analyse fairness concerns in a baseline game and a high stakes game. We estimate and test four different statistical models for examining the nature of fairness considerations. We find that cooperative behaviour of people reflects fairness concerns rather than unconditional altruism. The finding supports recent theoretical work, which pays great attention to positive reciprocation- fairness concerns rather than altruism or egoism. Furthermore, consistent with the results of recent experiments, which employ an ultimatum game, a dictator game, and a gift exchange game, we find that high stakes have no impact
on the fairness concerns. Moreover, in the presence high stakes, raised by a factor
of 10 over baseline payoffs, we observe significantly higher unselfish behaviour overall. Consistent with the results of classic experiments in the Prisoner’s Dilemma
Game, we detect that cooperation rates decline with repetition. Our results also
suggest that Mongolian subjects are more cooperative than the subjects of the UK
and USA. Finally, we also find behavioural differences, an avenue for future
research, in the data.