Transcontinental experimental economics

There are a few papers in experimental economics that do an international comparison of how various groups perform in an identical experiment. There are always doubts about these comparisons because the conditions may not have been the same in the various locations. But as far as I know, never has there been people on different continents playing against each other on the same experiment. This is what Romina Boarini, Jean-François Laslier and Stéphane Robin do with students in France and India.

They play the standard ultimatum game, where one side make an offer on how to share a prize, and the other accepts or rejects, a rejection triggering no payout. Interestingly, the outcomes are not symmetric. When French students play first, the splits were typically unequal in their favor, but when Indian students played first, the splits were mostly equal. How should we interpret this result? Cultural differences with respect to equity and fairness? Different attitudes towards bargaining? Or does this have to do with the different buying power of the payout in the two countries?

Actually, the notion of equity here is rather complex. "Formal equality" would call for each to receive the same, out of principle. "Compensation equity" requires that more goes to the one with the highest marginal utility, India. And "local equity" calls for each to be able to get the same goods, thus more going to France where prices are higher. This means that if players equity into consideration, it can be consistent with any result. What is more interesting is how Indian players are more tolerant of low offers than French players. Somehow, they find the cost of refusing a low offer too high, and the French players exploit this. Income differences definitely play a role here. Would these considerations crowd out equity? I am afraid so, and one should not read too much into the results as to what kind of equity is at play.