Irrational econ
how would u react to this situation?
u are playing an impunity game in a game theory study. another player, player a, has been offered $100, and is instructed to share with you, player b, however much he wants and keep the rest. he offers to share $20, and will receive notice of either your acceptance or refusal of the money. do u accept? to reiterate, he keeps his $80 regardless of whether u accept his offer or not.
if u didn’t accept the initial offer, would u accept the money if player a won’t receive notice of your acceptance or refusal?
if u did accept the initial offer, would u still accept it if player a offered u only $2?
to see why i’m asking the question, read this link.
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very interesting study. do player a or b ever see each other’s faces? also, whenever I take these studies I always feel incredibly distrustful of the experiment, like there is some final trick in the end. i wonder if this sentiment is common and if it may impact the final results.
i don’t know the setup, and the paper isn’t out until next week so i can’t link to it to see if they were face to face. but what we’ve learned is that ppl price their own pride at a certain percentage of the pot of money. it’d be interesting to read the entire study to see if they tested the inverse. in past ultimatum game studies, player b’s from collectivist societies have tended to reject imbalanced offers even when the imbalance was in their favor.
one other thing to check is to see if researchers led players to believe they weren’t being watched. players might act differently if they thought absolutely no one, including researchers, would know.
if saying no ends the game and I leave with nothing, then obviously accepting any amount of money is the correct choice. but if I could see the guy’s face and he gave me a bad deal, I’d wait for him in the parking lot :)
i’m not sure there’s a correct choice. there’s a “rational” one if u only consider cash value, but for some there appears to be a psychological cost. if taking $2 hurts ur pride so much that u’d feel bad about yourself for any length of time, maybe it really would make more sense to reject it.
haha, I just read the part about the ‘private impunity game’. for the person making the offer, why would you even split the money. I would take the whole $100 or as close to it as I could get. and on the flip side, if you knew that the person making the offer got the money and would never hear your response, why would you NOT take any amount money. that is just dumb. then again the article is about irrational behavior. maybe the ultimatum game doesn’t work on gamblers.
the “person” offering the money may just be a computer. sometimes, they just tell player b that player a is in another room and run a program that automatically shares a certain amount of money.
as for the ppl being dumb, that’s why i brought up “psychological cost”. there don’t appear to be many other good explanations for rejecting the money. a followup study should target street beggars and see how they take test, as the typical demographic of these studies are college students who might have high self-esteem/conceit.
I’m generally suspicious of studies like this. So much could factor into the results that the researchers don’t account for. How was the question asked? What did the researcher look like? Could the participants think that they were being recorded? This reminds me, I took this one study over a year ago and they were supposed to send me my compensation by mail, but I never received it and just forgot about it until now…
they probably use college students as subjects because they’ll forget about the compensation.