Technical Report Evolution of Fairness and Group Formation in Multi-Player Ultimatum Games

NISHIMURA, Takeshi  ,  OKADA, Akira  ,  SHIRATA, Yasuhiro

2015-08 , Graduate School of Economics, Hitotsubashi University
Description
Group formation is a fundamental activity in human society. Humans often exclude others from a group and divide the group benefit in a fair way only among group members. Such an allocation is called in-group fair. Does natural selection favor an in-group fair allocation? We investigate the evolution of fairness and group formation in a three-person Ultimatum Game (UG) in which the group value depends on its size. In a stochastic model of the frequency-dependent Moran process, natural selection favors the formation of a two-person subgroup in the low mutation limit if its group value exceeds a high proportion (0.7) of that of the largest group. Stochastic evolutionary game theory provides theoretical support to explain the behavior of human subjects in economic experiments of a three-person UG.
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http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/27395/1/070econDP15-06.pdf

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