More Is Better, But Fair Is Fair: Tipping in Dictator and Ultimatum Games

This paper examines Allocators' willingness to reward and punish their paired Recipients. Recipients only compete in a skill-testing contest, the outcome of which determines the size of the surplus. In the dictator game, Allocators reward skillful Recipients, but punish unskillful ones only modestly. The punishment effect is mitigated by the belief held by some Allocators thateffortis the appropriate measure of deservingness. The ultimatum game extension reveals offerers' ability to adapt to the strategic environment. Offers to skillful Recipients in the ultimatum game, however, are shown to be motivated by a taste for fairness, and not strategic considerations.Journal of Economic LiteratureClassification Numbers: C70, C91, D63.