The impact of social comparison and (un)fairness on upstream indirect reciprocity: Evidence from ERP

Abstract

Event-related potential (ERP) technology and the dictator game paradigm are used to explore the formation mechanism of upstream indirect reciprocity behaviors. We design a within subject experiment of 3 (social comparison: upward versus parallel versus downward) × 2 (treatment: fair versus unfair) involving 49 subjects. In the first round of allocations, subjects are forced to accept a monetary amount allocated to them by another player. In the second round, subjects assume the role of allocator and divide a monetary amount between themselves and a third party. Our results show the following: 1) Having received fair treatment from someone else, individuals engaged in downward comparison are more inclined to reciprocate the fairness they had received to a third party compared to individuals in parallel and upward comparison conditions. If individuals receive unfair treatment, they tend to repeat this behavior to a third party regardless of which social comparison condition they are in; 2) Under the condition of upward comparison, individuals receiving unfair treatment exhibit greater FRN amplitude and less P300 amplitude, but in parallel and downward comparison conditions, there is no significance in FRN and P300 amplitude between individuals receiving fair and unfair treatment.