A Tale of Two Tails : Preferences of Neutral Third-Parties in Three-Player Ultimatum Games

We present a new three-player game in which a proposer makes a suggestion on how to split $10 with a passive responder. The offer is accepted or rejected depending on the strategy profile of the neutral third-party whose payoffs are independent from his decisions. If the offer is accepted the split takes place as suggested, if rejected, then both proposer and receiver get $0. The game allows us to study the social preferences of the decision-makers when these are free of any strategic or monetary concerns. Next we introduce two variations to the game. In the first one we add a cost to rejecting offers, in the second we have computers randomly making the split suggestions. In both situations the neutral decision-makers are mainly concerned with inequality, and not so much with the (selfish) intentions of the proposer, as had been suggested previously in the literature