Dictator Game
- Inventor of Game: Daniel Kahneman
The Dictator Game is a part of the various versions of ultimatum games. This is a simplistic game where one person takes on the “Dictator” role and provides someone a one-time offer. The person can say yes or no only, without waffling. Whatever their choice is, they must live with it. If the person takes the offer, they technically win something out of the game. If they choose to not accept it, both the dictator and the other player will get nothing. The game is played with the knowledge that there is an endowment of any specific amount. The first player or the “dictator” will determine how the money is split between themselves and the other player. Keep in mind that the dictator can offer any sum they choose. Therefore, the percentage they offer could differ depending on who is playing.
They could offer every bit of the endowment or nothing at all. The recipient or second player has no influence on this decision, but they can always negotiate. They simply cannot make this one-time offer, only the dictator can. Keep in mind that only ONE offer can be made, not several like you might see in a business negotiation. Many believe that based on the limited role the second player has, they will have to accept any offer the dictator makes unless it is nothing. The dictator would want to avoid offering nothing, as a rejection would result in both the second player and dictator getting nothing. Thus, it would benefit them to reject an offer of $0.00. The reason? They’d ensure the dictator took home the exact same amount as them…nothing.