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 limit ation to this general result is the possibility that experimental results a re an artifact of small stakes. Implementing the ultimatum game in Indonesi a makes it possible to raise the stakes to three times the monthly expendit ure of the average participant. Even with these sizable incentives, results do not uniformly approach the sub-game perfect, selfish outcomes. More spe cifically, responders become more willing to accept a given percentage offe r at higher stakes, but proposer behavior is largely invariant to stake cha nges. (JEL C91, C78).