Expect the Worst! Expectations and Social Interactive Decision Making

Abstract

Psychological studies have demonstrated that expectations can have substantial effects on choice behavior, although the role of expectations on social decision making in particular has been relatively unexplored. To broaden our knowledge, we examined the role of expectations on decision making when interacting with new game partners and then also in a subsequent interaction with the same partners. To perform this, 38 participants played an Ultimatum Game (UG) in the role of responders and were primed to expect to play with two different groups of proposers, either those that were relatively fair (a tendency to propose an equal split—the high expectation condition) or unfair (with a history of offering unequal splits—the low expectation condition). After playing these 40 UG rounds, they then played 40 Dictator Games (DG) as allocator with the same set of partners. The results showed that expectations affect UG decisions, with a greater proportion of unfair offers rejected from the high as compared to the low expectation group, suggesting that players utilize specific expectations of social interaction as a behavioral reference point. Importantly, this was evident within subjects. Interestingly, we also demonstrated that these expectation effects carried over to the subsequent DG. Participants allocated more money to the recipients of the high expectation group as well to those who made equal offers and, in particular, when the latter were expected to behave unfairly, suggesting that people tend to forgive negative violations and appreciate and reward positive violations. Therefore, both the expectations of others’ behavior and their violations play an important role in subsequent allocation decisions. Together, these two studies extend our knowledge of the role of expectations in social decision making.