Social preferences or moral concerns: What drives rejections in the Ultimatum game?

TL;DR

This paper investigates the motivations behind rejection behavior in the Ultimatum Game, finding that social preferences, especially spite, primarily drive rejections, while moral concerns amplify this behavior.

Contribution

It introduces a unified model combining social preferences and moral concerns, showing social preferences as the main driver of rejections and moral concerns as an amplifier.

Findings

Spite is necessary and sufficient for rejecting positive offers.

Rejection thresholds increase with moral concerns.

Two distinct types of rejecters identified based on preferences.

Abstract

Rejections of positive offers in the Ultimatum Game have been attributed to different motivations. We show that a model combining social preferences and moral concerns provides a unifying explanation for these rejections while accounting for additional evidence. Under the preferences considered, a positive degree of spite is a necessary and sufficient condition for rejecting positive offers. This indicates that social preferences, rather than moral concerns, drive rejection behavior. This does not imply that moral concerns do not matter. We show that rejection thresholds increase with individuals' moral concerns, suggesting that morality acts as an amplifier of social preferences. Using data from van Leeuwen and Alger (2024), we estimate individuals' social preferences and moral concerns using a finite mixture approach. Consistent with previous evidence, we identify two types of individuals who reject positive offers in the Ultimatum Game, but that differ in their Dictator Game behavior.