The Belief that Others Think Effort should be Rewarded:
Experimental Evidence in Dictator Games

Kazuhito Ogawai
Toru Takemotoii
Hiromasa Takahashiiii
Akihiro Suzukiiv
Research Group of Economics and Management
No. 2010-E04
2010.10

Faculty of Economics, Osaka Sangyo University, E-mail: kz-ogawa@eco.osaka-sandai.ac.jp
Faculty of Economics, Tezukayama University, E-mail: takemoto@tezukayama-u.ac.jp
iii Faculty of International Studies, Hiroshima City University, E-mail: htaka@intl.hiroshima-cu.ac.jp
iv Faculty of Literature and Social Sciences, Yamagata University, E-mail:asuzuki@human.kj.yamagata-u.ac.jpiii

The Belief that Others Think Eﬀort should be
Rewarded: Experimental Evidence in Dictator
Games∗
Kazuhito Ogawa†, Toru Takemoto‡, Hiromasa Takahashi§,and Akihiro Suzuki¶
September 1, 2009

Abstract
This paper investigates the belief held by the recipients when they canmake an eﬀort in the experimental dictator game. The experimental result
indicates that the recipients have the belief that others think eﬀort should be
rewarded. Furthermore, when the dictators act diﬀerently from the belief, therecipients change the belief and relax their eﬀort.

Keywords: Dictator game; Experimental economics; Belief; Eﬀort

JEL Classification: C78, C91, D63, and D83∗

This work was supported by Grant-in-Aid for Scientific Research (C) (18530226) and by theOpen Research Centre “Experimental Economics: A new method of teaching economics and theresearch on its impact on society,” the Graduate School of Economics, Kyoto Sangyo University.
†
Faculty of Ecnomics, Osaka Sangyo University‡
Faculty of Economics, Meikai University§
Faculty of International Studies, Hiroshima City University, 3-4-1 Ozuka-Higashi, Asa-Minami,
Hiroshima 731-3194, Japan. Tel.: +81-82-830-1500. E-mail: htaka@intl.hiroshima-cu.ac.jp¶
Faculty of Literature and Social Sciences, Yamagata University

1

1

Introduction

It is frequently asserted that, since farmers make substantial eﬀort for a relatively
low income, subsidies should be given to the agricultural industry. However, farmers
earn a low income primarily because their hard work is often fruitless. In sum, it
can be said that persons advocating agricultural subsidies think that eﬀort should
be rewarded–even if the eﬀort is ultimately fruitless–and believe that other people
have the same opinion. Do most people share this belief, or is it only the farmers?
This paper aims to elucidate the frequency and role of such beliefs through dictator
game experiments.
The dictator game is an experimental model used to analyze donation or income
transfer. In the dictator game, one player, called the dictator, divides a certain
amount of money between himself or herself and another player, called the recipient.
Typically, the recipient merely accepts the money and takes no action. As a result,standard dictator game experiments do not reveal the thoughts of the recipient; forthis reason, researchers make use of a questionnaire.
It is true that people regarded as recipients, such as disabled people and welfare
recipients, will sometimes take action; indeed, recipients must have various feelings
towards people whose income is transferred to them (i.e., dictators).
Consequently, this paper adds a “working stage” before the standard dictator
game in which the dictator and/or recipient engage in a work task (calculation test).1
Comparisons of the recipient’s actions in the working stage–i.e., the diﬀerences in
the recipient’s score on the calculation test–during diﬀerent treatments may reveal
the recipient’s changing beliefs and eﬀorts under the dictator game stage.
Our predictions are as follows: The recipient believes that the dictator thinks
eﬀort should be rewarded. If a recipient has such a belief and knows that the dictator
will be informed of the recipient’s score on the calculation test, the recipient’s scorewill be higher than if the recipient does not have such a belief. When the recipient
feels that the transfer from the dictator is small, the recipient is more likely to feel1

In the experiment described in this paper, the amount of money given to the dictator and therecipient did not depend on the outcome of the recipient’s task.

2that the dictator does not think eﬀort should be rewarded, and the recipient willconsequently relax his or her eﬀorts, lowering his or her score.
We define eﬀort as the diﬀerence in calculation test scores. For example, if
a recipient’s score is 94 points in one calculation test and 97 points in anothercalculation test, for example, the recipient’s eﬀort in the second test is determinedby the diﬀerence between the two scores (3 points).
The dictator game originated from a study of a problem in finite-horizon bargaining games (See Ståhl (1972)): observed oﬀers are often more than that of the theoretical solution. Güth, Schmittberger, and Schwarze (1982) tested the oﬀer madeto the other person in an experiment of an ultimatum game, which is a two-stage
bargaining game. In the ultimatum game, first, player 1 makes an oﬀer (x1 , 1 − x1 ).
Next, player 2 accepts or rejects this oﬀer. If player 2 accepts it, player 2 gets 1 − x1
and player 1 gets x1 . If player 2 rejects it, both players earn nothing. The backward
induction outcome of this game is (1, 0), i.e., player 1 gets (almost) everything andplayer 2 accepts player 1’s oﬀer.
However, Güth et al. (1982) showed that mean oﬀers of player 1 are more than
30% of the total amount and that player 2 often rejects oﬀers below 20%. Thisoutcome may be caused by the ability of player 2 to reject oﬀers.
Therefore, Kahneman, Knetsch, and Thaler (1986) experimented with a dictator
game where player 2 has to accept any oﬀer made by the player 1. Kahneman et al.
(1986) gave player 1 two alternatives, ($10, $10) and ($18, $2). In the experiment,
76% of the subjects chose even splits. Forsythe, Horowitz, Savin, and Sefton (1994)
compared the results of the ultimatum game with those ot the dictator game andobtained a mean contribution rate of about 20%.
Since there seems to be no strategic reason in dictator games, the positive oﬀer
rate may stem from altruism. In reality, in almost all the experiments, a positiveoﬀer was observed. Cason and Mui (1998) conducted experimental sequential dictator games to observe whether the information content aﬀected the dictators’ beliefs
and changed their behavior. All the subjects chose their stakes and were informed
about their potential counterparts’ stake under “relevant treatment” and the day3

of the month on which he/she was born under “irrelevant treatment.” Then all ofthem chose the second stakes. Finally, the subjects’ role was randomly determined
as a dictator or a recipient. As a result, the information diﬀerence did not aﬀect
their beliefs or behavior; further, under “irrelevant treatment”, some of the subjects’
stakes were more self-regarding. This was not observed under “relevant treatment”.
Thus, the relavant information, i.e., the stake of the potential counterpart, constrained some subjects from moving toward more self-regarding oﬀers. For moresurvey, involving experimental ultimatum and dictator games, see Camerer (2003).
Many recent studies describe experiments that incorporate an additional decisionmaking stage before the standard dictator game.2 Cherry, Frayblom, and Shogren(2002) introduced an earnings stage where the dictators answered 17 questions from
GMAT before the bargaing. People with high scores received $40 while those withlow scores received $10. In Yamamori, Kato, Kawagoe, and Matsui (2008), therecipient declares his desired monetary allotment.3 Moreover, in Yamamori, Kato,
Kawagoe, and Matsui (2007), the dictator and recipient engage in online chat. Theyshow that voice-based communications increase the dictator’s donation to the recipient.
Our experiment can be interpreted to have a signaling aspect; this is in contrast
to the cheap talk aspect of the experiments mentioned above. Since cheap talkcosts nothing, it can be used as a dominant strategy by the recipient to request
a large monetary allotment, and it may be diﬃcult to determine the diﬀerencesin the eﬀort invested by the recipient in such experiments. In our experiment,
however, calculation tests require the input of eﬀort–the higher the score desired by
the recipient, the greater the eﬀort he or she must make.4 If the transfer from the2

Conducting the experimental dictator game outside the laboratory is another recent trend. For
example, Henrich, Boyd, Bowles, Camerer, Fehr, Gintis, and McElreath (2001) conducted dictator
game experiments in three small-scale societies: Orama in Kenya, Hadza in Tanzania, and Tsimanéin Bolivia. They found the human behavior to be entirely diﬀerent from the theoretical prediction
and also noted that mode of the amount of money donated diﬀered from society to society andwas aﬀected by the economic patterns of everyday life in their societies.
3
Hoﬀman, McCabe, Shachat, and Smith (1994) assigns the dictator role to subjects who obtained a high score in a knowledge quiz and the recipient role to subjects with a low score in thesame quiz.
4
Gneezy and List (2006) conducted a field experiment to investigate whether workers who earn
unexpectedly high hourly wages made more eﬀort than workers who earn average wages.

4dictator is small, the recipient may do the calculations without much eﬀort or may
choose not to complete the calculation test at all.
This paper is organized as follows: In Section 2, we explain the details of our experiment. Section 3.2 is devoted to the description of the outcome of our experiment.
Section 4 concludes the paper.

2

Experiment

2.1

Experimental Design

The entire experiment consisted of two treatments: treatment A and treatment B.
Each treatment was divided into a working stage and a dictator game stage. The
working stage was immediately followed by the dictator game stage. Furthermore,treatment A was divided into two subtreatments depending on what the dictators
did in the working stage: treatment A1 and treatment A2.
During the working stage, the dictators and the recipients were in the separeterooms. During this stage, the recipients were required to complete a calculation
test comprising 100 addition and subtraction problems involving two- or three-digit
numbers.5 They were given 20 minutes to complete the calculation test. In treatment A, the dictators were informed of the fact that the recipients had completed
their calculation tests. While, in treatment B, the dictators were not informed ofthat. In treatment A1 and treatment B, the dictators also completed the same test.
After the working stage, the recipients moved into the room where the dictators
were sitting, and the dictator game stage began. During the dictator game stage,subjects played the dictator game. In treatment A, the dictators were given thescores of the recipients paired with them at the begining of the stage. In treatment
B, the dictators were not informed of that.6 In treatment A1 and treatment B, eachdictator was given a certain amount of money, in accordance with the dictator’s

5

Each subject was randomly assigned the role of either dictator or recipient at the beginningof the session.
6
The recipients were not informed of their own scores in both the treatment.

5

score on the calculation test. This given money was the endowment of the dictator
game. The relationship between the amount of money given to the dictators and thecalculation test score is presented in Table 1. Note that the scores of the recipients
had no eﬀect on the amount of money given to the dictators. In treatment A2, eachdictator was given JPY 1200 as endowment of the dictator game.
In each treatment, the working stage and the dictator game stage were repeatedthrice in the same order. The dictator-recipient pairs were changed randomly ineach round. The role of the subjects remained unchanged for the duration of eachtreatment.

2.1.1

Design of Treatment A

In treatment A, during the working stage, the dictators were informed of the fact thatthe recipients had completed their calculation tests, and were given the recipients’scores. The following information was provided to the dictators and recipients, whowere sitting in separate rooms:(1) At the beginning of the dictator game stage, each dictator was informed of thescore of the recipient paired with him or her, according to the score categories
in Table 1.
(2) At the beginning of the dictator game stage, each recipient was informed of theamount of money given to the dictator paired with him or her as an endowmentof the dictator game.
(3) The working stage and dictator game stage were repeated thrice in the sameorder.
(4) The dictator-recipient pairs were changed randomly in each round.
In addition, the recipients were given the following information:(5) The score of each recipient had no eﬀect on the amount of money given to the
dictator paired with him or her.
6(6) The recipients were not informed of their own scores.
(7) The dictators earned money on the basis of their scores on the calculation test.
In addition to items (1)–(4), the dictators were informed that they were given money
corresponding to their own scores on the calculation test (as shown in Table 1) asan endowment of the dictator game. Furthermore, they were informed that therecipients were aware of item (7).
After completing their calculation tests in an adjacent room, the recipients weremoved to the room where the dictators were sitting, where the participants entered
their answers to the calculation test into a computer in order to confirm their scores.
2.1.2

Design of Treatment B

In treatment B, the dictators were not informed of the fact that the recipients hadcompleted their calculation tests. Hence, the information given to the subjects
during treatment B was the same as that during treatment A, except that the
subjects were not made aware of item (1). Furthermore, the recipients were notrequired to enter their answers into the computer after moving into the room where
the dictators were sitting. Treatment B was otherwise the same as treatment A.

2.2

Overview of the Experiment

The experiment was performed at the Kyoto Experimental Economics Laboratory of
Kyoto Sangyo University in October 2007, December 2007, May 2008 and July 2009.
84 undergraduate students of Kyoto Sangyo University participated the experimentas the recipients and the same number of the students participated as the dictators.
See Table 2. All the subjects participated in only one session. None of thesubjects had previously participated in a dictator game experiment, though some
had participated in another experiment. Each session took approximately two to
three hours to complete. The amount of money rewarded to the subjects ranged from
JPY0 to JPY3600.7 A copy of z-Tree (Fischbacher (2007)), licensed to Kazuhito
7

Recipients who had participated in another experiment were rewarded at least JPY2000 in
total. Dictators were not informed of this.

7

Ogawa, was used as the application software for the experiment.
The following details the interaction between the subjects. The dictators andrecipients gathered in diﬀerent places after receiving their role assignments. Next,
the dictators were led to room 1 and the recipients were led to room 2, which wasnext to room 1. Room 1 was divided by partitions into front and rear sections. The
dictators sat down in predetermined places in the front section of room 1. The working stages for both dictators and recipients began at the same time. The recipientswere moved into room 1, where they entered the answers of their calculations into
the computer. Note that they entered room 1 from the rear door and sat down inpredetermined places in the rear section. After the end of the dictator game stage,
the recipients were moved back into room 2. The dictators and recipients were dismissed at diﬀerent times. The aim of the procedures mentioned above was to limit
the contact between the dictators and recipients as much as possible.

3

Experimental Result

3.1

Overview

Table 3 provides the average score, with standard deviation, of the recipients inevery round under each treatment. One recipient under treatment B misinterpreted
the instructions, reducing the number of subjects under treatment B to 25.
Figure 1 illustrates the average score of recipients from rounds one to three
under both treatments. While the average score of the recipients under treatment
A decreased in round three as compared to rounds one and two, there was littlechange in the average score of the recipients under treatment B over the course of
the three rounds.
Since the perfect score of the calculation tests is 100, the analysis may be aﬀectedby ceiling eﬀect. We discuss the eﬀect in Section 3.2.

8

3.2

AnalysisTable 3 and Figure 1 support the following two assertions. First, the average scoreof the recipients was siginificantly higher in round one under treatment A than in
the same round under treatment B (Mann-Whitney test, p = 0.072). This indicatesthat the average score of recipients is higher when a dictator is informed of the scoreof his or her recipient. The recipients under treatment A therefore exerted greater
eﬀort than those under treatment B.8 This is because the recipients under treatment
A anticipated high distribution.
Second, the average score of the recipients under treatment A was siginificantly
higher in round one than that in round three (Wilcoxon rank sum test, p = 0.097).9
Clearly, the recipients relaxed their eﬀorts gradually over the course of the threerounds.
Was fatigue the reason for the decreasing eﬀorts of recipients in completing thethree calculation tests or was it unsatisfactory distribution from the dictator? Inorder to verify the cause, we compared the eﬀort put forth by satisfied recipientswith that put forth by unsatisfied recipients in round three from the standpointof round one (that is, the diﬀerence in scores between rounds one and three). For
example, if the eﬀort put forth by satisfied recipients is positive or zero and theeﬀort put forth by other recipients is negative, the reason for decreasing eﬀort isunsatisfactory distribution by the dictator. On the other hand, if the eﬀort put
forth by satisfied recipients is also negative and there is no significant diﬀerence
between the eﬀort put forth by satisfied and unsatisfied recipients, the reason for
the recipients’ decreasing eﬀort is fatigue.
We defined a recipient who successfully obtained over 50% of the endowment of
the dictator paired with him or her in rounds one or two, i.e., 600 JPY, as a “satisfied
recipient”. There were four satisfied recipients. The other twenty-three recipientswere “unsatisfied recipients”. Table 4 and Figure 2 illustrate the average scores of

8

The same result was observed in round two.
No significant diﬀerence was observed between the average score of the recipients in roundthree under treatment A and that of the recipients in round three under treatment B.
99satisfied and unsatisfied recipients. The average score of the satisfied recipients ishigher than that of the unsatisfied recipients in every round. In addition, the averagescore of the satisfied recipients in round three is the same as that in the previous
rounds.
Using this classification, we first examined the diﬀerence in scores between rounds
one and three for both types of recipients. The diﬀerence in score for satisfied
recipients is not significant (Wilcoxon rank sum test, p = 0.593), while the diﬀerence
for unsatisfied recipients is significant (Wilcoxon rank sum test, p = 0.086 andpairwise two-tailed t-test, p = 0.049). This result shows that satisfied recipients
made greater eﬀort than the unsatified recipients in all the three rounds. Moreover,while the eﬀort level of the satisfied recipients remained relatively constant in all
the three rounds, that of unsatisfied recipients decreased by round three. The score
diﬀerence in round three between satisfied and unsatisfied recipients is significant
at the 1% level (Mann-Whitney test).10 Recipient satisfaction was therefore an
important issue. On the other hand, we cannot say that fatigue was one of thecauses of the low score, since the diﬀerence in the average scores of the satisfied
recipients between rounds one and three was not statistically significant.
Since the perfect score of the calculation tests is 100, the analysis may be aﬀectedby ceiling eﬀect. The problem caused by the eﬀect is that the existing diﬀerencein variables become undetectable. However, we demonstrated significant diﬀerenceby using nonparametric statistics. Hence, in our case, the ceiling eﬀect is not muchdiﬃculty though the bigger diﬀerence may be demonstrated if not aﬀected by ceilingeﬀect.
It is natural that the recipients believe that the dictator thinks eﬀort should be
rewarded. While the recipients who successfully obtained higher amounts of moneyfrom the dictator continued to put forth eﬀort during the calculation tests, otherrecipients, who became aware of the gap between their eﬀort and the actual result,relaxed their eﬀort. In other words, the recipients who obtained only a small reward
from the dictator changed their beliefs.
10

The score diﬀerence in round one between satisfied and unsatisfied recipients is not significant.

10

4Concluding Remarks

Although the recipients in typical dictator games usually do nothing, the recipientsin our experiment completed calculation tests in order to enable us to understandtheir beliefs regarding eﬀort and reward. The results indicate that recipients initially believed that the dictators think eﬀort should be rewarded; subsequently, therecipients who were not adequately rewarded by the dictators changed their beliefs
to reflect the perceived disparity between eﬀort and reward.
If the recipients believe that the dictators think eﬀort should be rewarded, they
will put forth eﬀort to earn high scores. On the other hand, if the dictators think
eﬀort should be rewarded, they will donate more money to recipients who haveearned high scores. In doing so, the dictators unintentionally reinforce the belief ofthe recipients, and, as a result, the recipients put forth more eﬀort to earn higherscores and better rewards in upcoming rounds. If the recipients do not believe thatthe dictators reward eﬀort, the recipients’ score on the calculation tests will be poor;
when the dictators become aware of this result, they may donate less money to therecipients with low scores, reinforcing the belief that eﬀort is not rewarded.
The belief of economic entities, therefore, directly aﬀects their decision making.
In the first round under treatment A, the recipients believed that the dictators
rewarded eﬀort, and, as such, these recipients earned high scores on the calculation
tests. However, when this belief was not maintained, the average score decreased
with each round. Thus, the belief of economic entities with respect to the intent ofother entities is an important decision-making factor.
Furthermore, such beliefs can aﬀect the decision-making processes of other entities; for example, when the recipients believe that the dictators think eﬀort should
be rewarded, the dictators may give more money to them, and, conversely, recipientslacking such a belief may receive less money from the dictators.
Therefore, when designing a distribution scheme, it is important to investigate
the particular beliefs of each party and the kind of relationships exist among these
beliefs. The goal of our future research is to develop an appropriate distribution11

scheme, that reflects the beliefs of each entity and the various relationships between
them.

References
Camerer, Colin F. (2003) Behavioral Game Theory: Experiments in Strategic Interaction: Princeton University Press Princeton.
Cason, T.N. and Mui, V.L. (1998) “Social Influence in the Sequential Dictator
Game”, Journal of Mathematical Psychology, 42, 248–265.
Cherry, T. L., R. Frayblom, and Shogren, J. F. (2002) “Hardnose the Dictator”,
American Economic Review, 92, 1218–1221
Fischbacher, U. (2007). z-Tree: Zurich Toolbox for Ready-made Economic Experiments. Experimental Economics, 10, 171–178.
Forsythe, R., J.L. Horowitz, N.E. Savin, and Sefton, M. (1994) “Fairness in Simple
Bargaining Experiments”, Games and Economic Behavior, 6, 347–369.
Gneezy, U. and List, J. A. (2006). Putting Behavioral Economics to Work: Testingfor Gift Exchange in Labor Markets Using Field Experiments. Econometrica, 74,1365–1384.
Güth, W., R. Schmittberger, and Schwarze, B. (1982) “An Experimental Analysis
of Ultimatum Bargaining”, Journal of Economic Behavior and Organization, 3,
367–88.
Henrich, J., R. Boyd, S. Bowles, C. Camerer, E. Fehr, H. Gintis, and McElreath,
R. (2001) “In Search of Homo Economicus: Behavioral Experiments in 15 SmallScale Societies”, American Economic Review, 91, 73–78.
Hoﬀman, E., McCabe, K. A., Shachat, K. and Smith, V. L. (1994). Preferences,
Property Rights, and Anonymity in Bargaining Games. Games and Economic
Behavior, 7, 346–380.
12

Kahneman, D., J. L. Knetsch, and Thaler, R. (1986) “Fairness as a Constraint on
Profit Seeking: Entitlements in the Market”, American Economic Review, 76,
728–41.
Ståhl, I. (1972) Bargaining theory: (Ekonomiska forskningsinstitutet vid Handelshögskolan i Stockholm (EFI)).
Yamamori, T., Kato, K., Kawagoe, T. and Matsui A. (2007). Online Chat Leads toFairness in Dictator Games. Mimeo.
Yamamori, T., Kato, K., Kawagoe, T. and Matsui, A. (2008). Voice matters in a
dictator game. Experimental Economics, forthcoming.
Score
79 or lower
Between 80 and 89
90
91
92
93
94
95
96 or higher

Amount of Money
JPY15011
JPY300 ∗JPY450 ∗JPY600 ∗JPY750 ∗JPY900 ∗JPY1050 ∗JPY1100 ∗JPY1200 ∗Table 1: Relation between the Amount of Money and Score

Treatment Number of Recipients
A1
27
A2
33
B
24
Table 2: Experiment Overview

11

When the experiments were done, JPY1 ∼= USD0.009.

13

Treatment

Statistic
Average
MedianStandard deviation

Round One
97.3
99
3.2

A2

Average
MedianStandard deviation

97.4
98
3.3

97.9
98
1.8

96.5
98
6.0

A

Average
MedianStandard deviation

97.4
98
3.2

97.6
98
2.4

95.8
97.5
6.2

B

Average
MedianStandard deviation

95.4
96
4.0

95.6
95.5
3.9

95.0
97
4.1

A1

Round Two Round Three
97.3
94.9
98
97
2.9
6.4

∗ Figures in parentheses are the standard deviations.

Table 3: Average and Median Score of Recipients

Numberof datum

Statistic

SatisfiedUnsatisfied

Treatment

18

Average
MedianStandard deviation

Round
One
99.1
99.5
1.1

Round
Two
98.7
99.0
1.3

Round
Three
98.4
98.5
1.5

26

Average
MedianStandard deviation

98.8
99.0
1.2

98.0
98.5
2.3

96.3
98.0
5.7

∗ Figures in parentheses are the standard deviations.

Table 4: Average and Median Scores of Satisfied and Unsatisfied Recipients under
Treatment A

14

Score
98.0
97.5
97.0
96.5
96.0
95.5
95.0
94.5
94.0
93.5

One

Two

Three

Treatment A

Round

Treatment B

Figure 1: Average Score of Recipients

Score
100.5
99.5
98.5
97.5
96.5
95.5
94.5
93.5

One

Two

Three

Satisfied Recipient
Unsatisfied Recipient

Figure 2: Average Scores of Satisfied and Unsatisfied Recipients under Treatment
A15