Figure 1

Schematic of TPP game. TPP involves three subjects: player A (the dictator), player B (the receiver), and player C (the observer, who in turn can act as a punisher). Player A has an initial endowment of 20 points, which he can share with player B, selecting among three conditions: fair (10 for A and 10 for B), unfair (14 for A and 6 for B), and hyperunfair (18 for A and 2 for B). Player A’s decision is shown simultaneously to all players (empathic phase). Player C observes the dictator’s decision and can use part, or all, of his endowment (4 points) to punish Player A’s behavior. For every punishment point invested by Player C, 3 points are subtracted from Player A’s payoff, and 1 point is added to Player B’s payoff.