Raising the stakes in the ultimatum game: Experimental evidence from Indonesia

The ultimatum game has generated considerable interest because experimental evidence strongly rejects the standard game-theoretic predictions. A limitation to this general result is the possibility that experimental results are an artifact of small stakes. Implementing the ultimatum game in Indonesia makes it possible to raise the stakes to three times the monthly expenditure of the average participant. Even with these sizable incentives, results do not uniformly approach the sub-game perfect, selfish outcomes. More specifically, responders become more willing to accept a given percentage offer at higher stakes, but proposer behavior is largely invariant to stake changes. (JEL C91, C78).