Which is More Important, Proposer Identity or Allocation Motive? Event-Related Potential in Economic Decision-Making.

Purpose: Most studies have supported the view that individuals prefer to reward the in-group and discriminate against the out-group in response to unfair offers in the Ultimatum Game. However, the current study advanced a different view, that is, the "black sheep effect", in which in-group members were punished more severely compared with out-group members. This study aimed to incorporate proposer identity and allocation motive as possible explanations for offer rejection.Methods: In the current study, the in-group and out-group identities were distinguished by their health condition, and the allocation motive was defined according to its benefit maximization. With a total of 89 healthy college student participants, a mixed design of 2 (proposer identity: out-group vs in-group) × 2 (allocation motive: selfish vs random) × 2 (offer type: unfair vs fair) was used in the Ultimatum Game. Event-related potential (ERP) technology was used, and ERPs were recorded while participants processed the task.Results: The behavioral result showed that the "black sheep effect" was found on the fair offer when a random allocation motive was used. Our ERP result suggested that feedback-related negativity (FRN) and P300 were modulated by proposer identity but not by allocation motive. However, the allocation motive interacted with proposer identity affecting FRN and P300 when the fair offer was proposed.Conclusion: These findings demonstrated that the "black sheep effect" was related to the experience of the out-group member, such as disadvantage or distress, but it was also modulated by allocation motive. Meanwhile, the out-group (depressed college students) captured more attention because they violated individual expectations, according to the P300. This finding plays an integral role in understanding the mechanism of response to the "black sheep effect".Plain Language Summary: People prefer to receive fair offers compared to unfair offers, but they are more tolerant to in-group members compared with out-group members when facing unfair offers. However, what would you do if you knew the in-group members were making you the smallest offer possible with a self-interested motive to maximize their own gains? We used the Ultimatum Game (UG) to explore this issue. We invited 89 colleges to participate in this study, and they were randomly divided into in-group member, out-group member, selfish motive, and random motive groups. Then, we used event-related potential (ERP) technology to examine cognitive processing. We found the "back sheep effect" on the fair offer, which means that people prefer to accept the out-group member's offer when they had a random motive. We also found different feedback-related negativity (FRN) and P300 between the in-group and out-group members. In addition, the "black sheep effect" was found in the fair offers when the proposer presented a random motive. This finding plays an important role in understanding the mechanism of response to fair or unfair offers. [ABSTRACT FROM AUTHOR]