The Ultimate Game

  • celandine
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Post 3+ Months Ago

went digging through my old blog today and found this. forgive me if I shared it already, can't remember whether I have. thoughts?

'Economists call it the Ultimate Game, and have long contended it proves Homo sapiens insufficiently logical. Here's the situation. Two strangers are brought together by a third person who holds $1,000. He tells them the money is theirs to divide on these terms: Stranger A must propose how to split the $1,000, and Stranger B must either accept or reject A's offer. That concludes the game, no second round. Classical economists maintain Stranger A should say, "I propose that I get $999 and you get $1," and Stranger B should immediately respond, "I accept." Pure economic theory says A should maximize his gain by shafting B out of every possible farthing, while B should calculate that since his sole choice is between $1 and nothing, $1 is better. Yet researchers have played this game with volunteers in many nations, and it never works the way theory says. The bare-minimum offer is always rejected. Generally, A must offer at least 30 percent or B says no and both players get nothing. Classical economists have long harrumphed that B's response when the game is played with real money shows human beings are too emotional and insufficiently focused on maximizing outcomes.

This pot was stirred last week when researchers led by Dario Knoch of the University of Zurich reported that using magnets to disrupt the right prefrontal cortex of volunteers playing Stranger B caused them to become much more willing to accept low offers. Now, if someone was using magnetic waves to scramble parts of your brain, your bargaining skills might decline, too.

Offcourse, the Ultimate Game theory is essentially flawed. First, the game assumes money is superior to all other forms of possessions, including psychological well-being. But the world doesn't work that way. If I am Stranger B and accept the $1 offer, I have a dollar bill but also feel like a total dupe: And how can being made to feel like a dupe be worth a mere dollar? Any small-percentage offer accepted by B would make B feel unhappy and taken advantage of, while rejecting the small-percentage offer gives B the pleasure of feeling retribution was achieved against A. Once the offer gets up to around 30 percent, then the value of the money might equal whatever unpleasant thoughts B will experience when seeing A cackling and counting a larger pile of loot. Reactions like rejecting very low offers do not, as classical economists maintain, show that B fails to understand economics. They show that B understands money is not everything!'
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Post 3+ Months Ago

  • kc0tma
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Post 3+ Months Ago

Why not just $500 each?
  • righteous_trespasser
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Post 3+ Months Ago

That's what I thought aswell, but supposedly A is too bloody greedy ... I have no issues, so even if I were given a dollar I would accept it immediately and go on, but that's where I differ from other people maybe ...
  • kc0tma
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Or A could have just said $1000 for him and a swift kick in the pants for B.
  • spork
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Post 3+ Months Ago

"I acce--... aw crap."
  • Prime
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Post 3+ Months Ago

On th principle "came with nothing, leave with nothing", I wouldn't accept anything less than 50/50 for the values mentioned. As Celandine said, $1 is not enough to feel like a mug.
  • spork
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Post 3+ Months Ago

But that dollar could buy you a house!
  • joebert
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Quote:
using magnets to disrupt the right prefrontal cortex of volunteers playing Stranger B caused them to become much more willing to accept low offers.


Free headphones for everyone !
  • celandine
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Post 3+ Months Ago

Quote:
But that dollar could buy you a house!

jesus poor people....

yeah I don't think I'd go for less than 300 - 400 dollars... On the other hand I think if I got to be A, the offer I'd make would be 50%-50%. I just wouldn't feel right with anything else. guess I'm not too economically minded....

unrelatedly, there's a girl I work with (she works for the Customs of Serbia, I work for a consulting office that helps them) who's never been on a holiday cuz her salary is too low.... she's really nice and I'd love to just give her the 200 - 300 euro it takes to go to the coast for a week (my salary is easily 5 times hers) but of course she could never accept something like that..... I hate those complications in life. why can't you just help someone when you want to???
  • righteous_trespasser
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Post 3+ Months Ago

See ... again, there's the difference with me ... I would accept that no problem ... Strange how people differ ...
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Post 3+ Months Ago

I'd take the dollar & tell the shady looking guy down the street person A has $999 cash in their pocket.

Quote:
unrelatedly, there's a girl I work with (she works for the Customs of Serbia, I work for a consulting office that helps them) who's never been on a holiday cuz her salary is too low.... she's really nice and I'd love to just give her the 200 - 300 euro it takes to go to the coast for a week (my salary is easily 5 times hers) but of course she could never accept something like that..... I hate those complications in life. why can't you just help someone when you want to???


So pay her to plan a vacation for both of your families. Just make sure you choose your words carefully. ;)
  • celandine
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Post 3+ Months Ago

ha ha that's two cunning plans in one post, joe :D cool...

yeah the problem is we don't work in the same office or anything... otherwise I'd do just that - I'd say something like 'hey my (imaginary) uncle/cousin/whatever has this apartment down on the croatian coast and he's gonna let me use it for free, how about 3-4 of us girls go down there for a week? all you gotta do is pay the transport and food down there is cheap...' then I pay for the apartment (it's no money really) and bingo. but the problem is I'm not around her enough to suggest something like that... (we work in different buildings) and I'd need a few more people in on the scheme to make it work... still I'll keep thinking about it. maybe next year.

@R_T - yeah I guess you're a little more phlegmatic than most people... that's what I like about you :D
  • righteous_trespasser
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Post 3+ Months Ago

Very true ...
Joe, I like your plan ... well, I like most of your plans ...
  • joebert
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Post 3+ Months Ago

The funny part is that even though I couldn't accept, the shady looking guy would probably split it more in my favor than stranger A as thanks for the tipoff.
  • celandine
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Post 3+ Months Ago

so everybody profits!! I like lateral thinking.... :D

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