Status maximization as a source of fairness in a networked dictator game

Abstract

Human behavioural patterns exhibit selfish or competitive, as well as selfless or altruistic tendencies, both of which have demonstrable effects on human social and economic activity. In behavioural economics, such effects have traditionally been illustrated experimentally via simple games like the dictator and ultimatum games. Experiments with these games suggest that, beyond rational economic thinking, human decision-making processes are influenced by social preferences, such as an inclination to fairness. In this study we suggest that the apparent gap between competitive and altruistic human tendencies can be bridged by assuming that people are primarily maximising their status, i.e., a utility function different from simple profit maximisation. To this end we analyse a simple agent-based model, where individuals play the repeated dictator game in a social network they can modify. As model parameters we consider the living costs and the rate at which agents forget infractions by others. We find that individual strategies used in the game vary greatly, from selfish to selfless, and that both of the above parameters determine when individuals form complex and cohesive social networks. Dictator game, agent-based social simulation, superiority maximization PACS numbers:

Social structure formation in a network of agents playing a hybrid of ultimatum and dictator games

“…As the name implies, the working assumption of BTH is that humans are motivated primarily by the aim to maximise their social status in society, an assumption which is shared by Alfred Adler's school of individual psychology [8]. In [9] we discovered an abrupt behavioural change in a model derived from BTH, which could be interpreted as the formation of social structures due to outside pressure.…”

“…The hybrid double strategy model differs from the single strategy model of Ref. [9] such that with probability (1 − d), when the ultimatum game is played, the agent receiving the offer gets the choice of either accepting or rejecting the division of funds offered by the proposing agent. Then if agent i makes an offer to agent j the transaction occurs if either the dictator game is played or in case of the ultimatum game if x i ≥ y j .…”

“…In the case of the dictator game an agent playing with others with similar offering rates can expect to see a profit of M per playing partner. Thus it needs at least ⌊c⌋ neighbours to offset the living costs (as argued in [9]). Consequently it is there where the complex network structure formation occurs, as depicted in Fig.…”

“…The model we studied in [9] concerned a social network with agents playing dictator game with their neighbours. The agents were allowed to change their own connections, and the model was governed by two parameters, one of which, the memory parameter measuring how fast the agents forget the way they were treated, and the other, the cost parameter measuring, the proportion of money spent on living costs.…”

“…In this study we extend our earlier model presented in [9] by letting the agents play ultimatum game as well as dictator game, and take a look at the effects this has on the observed social structure and network formation. The motivation for this study is to test, how different modes of social interactions change the structures and dynamics of social networks of humans following the better than hypothesis (BTH).…”