Virtual worlds are gaining in popularity and are proposed as a test laboratory for the real world. In
these virtual worlds users act via their avatars and make decisions for them. In this paper, we analyze
the decision making in virtual worlds in an experiment conducted in a virtual world, as well as in the
real world over the internet, for the same set of subjects. For this purpose, we develop hypotheses for
decision making in the context of a classic economic experiment (the Dictator Game). We find similar
decisions in the virtual and the real world with respect to sharing. Altruism has a significant influence
in the real world setting but not in the virtual world; fairness is insignificant in both settings. We
identify the feeling of presence in one’s avatar and potential satiation effects as factors that influence
decisions regarding the allocation of resources in the virtual world.