Fairness evolution in the ultimatum game is a function of reward size

Abstract

I formulate a simple model of the ultimatum game, in which a proposer and a responder can receive a reward if they agree on how to divide this reward between them. The model is easy to analyse and shows that strong tendencies to fair division are expected when evolution of strategy frequencies follow the traditional gradient dynamics assumed in evolutionary models. The mean stable offer is typically around 20–40% although this depends on the maximum payoff and if rejection thresholds can evolve independently from proposals. The stable proportion offered at evolutionary equilibrium increases with the maximum payoff, if proposal and acceptance thresholds are dictated by the same strategy and cannot evolve independently. If proposal and acceptance evolve independently, the stable proportion instead decreases with the maximum payoff. The stable outcome may also show substantial variation.