Paying £1(£5) or nothing in dictator games: unexpected differences

Abstract

We conducted an online Dictator Game experiment (N = 1195) to test three hypotheses about the role of monetary incentives in prosocial behavior. First, we examined whether real incentives of £1 reduce the dispersion of responses compared to hypothetical ones. Surprisingly, we found the opposite: hypothetical responses were less dispersed, with choices clustering around the egalitarian split. This pattern held in a replication (N = 308) with higher stakes (£5), offering no support for the first hypothesis. Second, we tested whether real incentives—by involving actual monetary consequences—lead to more selfish decisions, as they are expected to reduce socially desirable responses. With £1 stakes, no significant differences emerged across conditions. However, when the stake was increased to £5, participants became more selfish under real incentives, supporting the second hypothesis only when the amount at stake is substantial. Third, we explored whether probabilistic payments trigger differential behavior. At low stakes, probabilistic incentives resembled real ones. But with higher stakes, real and probabilistic outcomes diverged, suggesting participants respond to expected value only when it is meaningful. Finally, in a separate study (N = 299), we found that many participants facing standard hypothetical-payment instructions still expected real payments. Only explicit phrasing stating that “unfortunately, the money is not real” alleviated this confusion. This result underscores the importance of precise wording in experimental design and potentially explains why hypothetical treatments do not yield dramatically different results compared to real-money treatments.