Do we care about the powerless third? An ERP study of the three-person ultimatum game

Abstract

Recent years have provided increasing insights into the factors affecting economic decision-making. Little is known about how these factors influence decisions that also bear consequences for other people. We examined whether decisions that also affected a third, passive player modulate the behavioral and neural responses to monetary offers in a modified version of the three-person ultimatum game. We aimed to elucidate to what extent social preferences affect early neuronal processing when subjects were evaluating offers that were fair or unfair to themselves, to the third player, or to both. As an event-related potential (ERP) index for early evaluation processes in economic decision-making, we recorded the medial frontal negativity (MFN) component in response to such offers. Unfair offers were rejected more often than equitable ones, in particular when negatively affecting the subject. While the MFN amplitude was higher following unfair as compared to fair offers to the subject, MFN amplitude was not modulated by the shares assigned to the third, passive player. Furthermore, rejection rates and MFN amplitudes following fair offers were positively correlated, as subjects showing lower MFN amplitudes following fair offers tended to reject unfair offers more often—but only if those offers negatively affected their own payoff. Altogether, the rejection behavior suggests that humans mainly care about a powerless third when they are confronted with inequality as well. The correlation between rejection rates and the MFN amplitude supports the notion that this ERP component is also modulated by positive events and highlights how our expectations concerning other humans' behavior guide our own decisions. However, social preferences like inequality aversion and concern for the well-being of others are not reflected in this early neuronal response, but seem to result from later, deliberate and higher-order cognitive processes.

The interplay between feedback-related negativity and individual differences in altruistic punishment: An EEG study

“…Our observation of fairness-dependent FRN deflections in the third party perspective appears to be in accordance with findings by Hewig et al (2008) who reported larger FRN amplitudes also when others are observed experiencing disadvantageous outcomes (however, see also for diverging results: Alexopoulos, Pfabigan, Lamm, Bauer, & Fischmeister, 2012;Alexopoulos, Pfabigan, Göschl, Bauer, & Fischmeister, 2013). One could speculate that such FRN modulations occur due to the observed violation of fairness norms.…”

Sex and the money – How gender stereotypes modulate economic decision-making: An ERP study

“…As to the electrophysiological response, we expect to observe a greater negativity of the FRN in response to unfair and mid-value offers than to fair offers, as in previous studies (Polezzi et al, 2008;Wu et al, 2011Wu et al, , 2012Alexopoulos et al, 2012Alexopoulos et al, , 2013Qu et al, 2013). Since the FRN is thought to be sensitive to socio-emotional evaluation of the game partners (Campanhã et al, 2011;Qu et al, 2013) and to social expectancy violation (Boksem and DeCremer, 2010;Wu et al, 2012), we may observe greater FRN effects whenever social expectations are not met (Wu et al, 2011(Wu et al, , 2012Qu et al, 2013;Alexopoulos et al, 2013).…”

“…A recent study showed that the nature of the shares offered to the third person in the third ultimatum game paradigm did not affect the amplitude of the FRN of the participants playing as responders (Alexopoulos et al, 2012(Alexopoulos et al, , 2013. Moreover, another study also demonstrated that making the responders compare the share they were proposed to shares received by others responders playing in different players' dyad did not lead to a modulation of the amplitude of the FRN (Wu et al, 2011).…”

“…Overall, a greater negativity of the FRN component was found in response to unfair offers than to fair offers (Polezzi et al, 2008;Wu et al, 2011Wu et al, , 2012Alexopoulos et al, 2012Alexopoulos et al, , 2013Qu et al, 2013); and more interestingly, also in response to extra-fair offers (i.e., shares superior to half the amount of money to split) compared to fair offers (Wu et al, 2012). The FRN has been shown to be sensitive to social expectancy and social norms violation in social paradigms (Boksem and DeCremer, 2010;Wu et al, 2012).…”

“…Several studies recently investigated fairness consideration and the associated neural correlates using the ultimatum game paradigm (Polezzi et al, 2008;Campanhã et al, 2011;Wu et al, 2011Wu et al, , 2012Alexopoulos et al, 2012Alexopoulos et al, , 2013Qu et al, 2013). Overall, a greater negativity of the FRN component was found in response to unfair offers than to fair offers (Polezzi et al, 2008;Wu et al, 2011Wu et al, , 2012Alexopoulos et al, 2012Alexopoulos et al, , 2013Qu et al, 2013); and more interestingly, also in response to extra-fair offers (i.e., shares superior to half the amount of money to split) compared to fair offers (Wu et al, 2012).…”