Negotiation: Lessons from the Dictator Game

The dictator game is an experimental economic game in which one of the players makes an offer that the other has no alternative but to accept. The dictator has to decide alone how to split a sum of money between him/herself and another person who is called the receiver. Contrary to theoretical predictions, our review of recent dictator bargaining data shows that the dictator generally offers a considerable proportion of the money to the receiver (20 to 40 percent), and that this proportion crucially depends on the social distance between the dictator and the receiver. We show that identification and communication processes, which reduce social distance, are able to direct the dictator’s attention towards the cost of deviating from the fairness norm. Consequently, we show that, under certain circumstances, the receiver can successfully reveal his identity, communicate his preferences, or even unconsciously influence the dictator, in order to defend his interests. We also analyze recent theoretical attempts to present individual social preferences in a formal framework. We show that the new behavioral models are able to take into account individual equity aversion as well as the inhibiting effect of shame.