[2014-10-09] Ultimatum game

[taijitu]

It's worth pointing out that the results of this game are culturally specific, as in the "unexpected" result that economicists get (depicted in the comic) are actually results specific to the west.

http://www.psmag.com/magazines/magazine ... ics-53135/

http://www.econ.nagoya-cu.ac.jp/~yhamagu/ultimatum.pdf

[walruss]

Not only is it culturally specific, it never made much sense to me. If you and a stranger were walking down the street together, and somebody came up and gave the stranger $100 out of the blue, most people wouldn't automatically expect to receive any money. And they certainly wouldn't tell the stranger that he couldn't have the money unless they got some as well. And if they did, they'd be jerks. That said, the neoclassical economist should have offered his partner exactly one cent, to give him incentive to accept.

[Kaharz]

It also isn't a new idea to sociology and anthropology. The idea that behavior is affected by culture was basically the core conclusion of Durkheim's Suicide. Whether Durkheim was right or not is another matter, but the idea was already there. They teach you that idea in intro to sociology. It is also the founding principle of cultural anthropology. Boas proposed the idea of cultural relativism over 100 years before this guy did his experiment in Peru.

[Ferdinand Lassalle]

It's worth pointing out that the results of this game are culturally specific, as in the "unexpected" result that economicists get (depicted in the comic) are actually results specific to the west.

http://www.psmag.com/magazines/magazine ... ics-53135/

http://www.econ.nagoya-cu.ac.jp/~yhamagu/ultimatum.pdf

Since we're already at it : The West != USA -> "...are actually results specific to the USA."

Greetings from Europe!

[dangerkeith300]

It's worth pointing out that the results of this game are culturally specific, as in the "unexpected" result that economicists get (depicted in the comic) are actually results specific to the west.

http://www.psmag.com/magazines/magazine ... ics-53135/

http://www.econ.nagoya-cu.ac.jp/~yhamagu/ultimatum.pdf

Thanks for sharing these links. It was a good read!

[taijitu]

It also isn't a new idea to sociology and anthropology. The idea that behavior is affected by culture was basically the core conclusion of Durkheim's Suicide. Whether Durkheim was right or not is another matter, but the idea was already there. They teach you that idea in intro to sociology. It is also the founding principle of cultural anthropology. Boas proposed the idea of cultural relativism over 100 years before this guy did his experiment in Peru.

Try telling that to an economist though. Or any "hard" scientist.

[DonRetrasado]

Yeah Kaharz don't you remember we already established that the social sciences are completely made up and we should all invest in bitcoin?

[Guest]

Not only is it culturally specific, it never made much sense to me. If you and a stranger were walking down the street together, and somebody came up and gave the stranger $100 out of the blue, most people wouldn't automatically expect to receive any money. And they certainly wouldn't tell the stranger that he couldn't have the money unless they got some as well. And if they did, they'd be jerks. That said, the neoclassical economist should have offered his partner exactly one cent, to give him incentive to accept.

Perhaps because it's fundamentally not the same thing as a person just witnessing another person being given $100. Instead the person was told they have to offer some of what was essentially a gift to someone else. If they're given $100 and they decide to keep it all I don't care. If they're told they have to give some away and offer a paltry sum even knowing that by doing so they could lose the whole thing, I think they deserve to lose the whole thing for being a greedy bastard. So one argument is that any amount is better than nothing, but to me watching them lose out for being a greedy bastard and essentially insulting me would definitely be worth more than 5 bucks. I might accept 20 and anything 25 or higher I would definitely accept, because they're not being a total dick and it's a decent amount. Five or ten dollars? I'd be happy to watch them lose it.

[taijitu]

Not only is it culturally specific, it never made much sense to me. If you and a stranger were walking down the street together, and somebody came up and gave the stranger $100 out of the blue, most people wouldn't automatically expect to receive any money. And they certainly wouldn't tell the stranger that he couldn't have the money unless they got some as well. And if they did, they'd be jerks. That said, the neoclassical economist should have offered his partner exactly one cent, to give him incentive to accept.

Perhaps because it's fundamentally not the same thing as a person just witnessing another person being given $100. Instead the person was told they have to offer some of what was essentially a gift to someone else. If they're given $100 and they decide to keep it all I don't care. If they're told they have to give some away and offer a paltry sum even knowing that by doing so they could lose the whole thing, I think they deserve to lose the whole thing for being a greedy bastard. So one argument is that any amount is better than nothing, but to me watching them lose out for being a greedy bastard and essentially insulting me would definitely be worth more than 5 bucks. I might accept 20 and anything 25 or higher I would definitely accept, because they're not being a total dick and it's a decent amount. Five or ten dollars? I'd be happy to watch them lose it.

Right exactly and a bunch of folks used this as a way to demonstrate the average human's "innate" sense of justice (versus economic rationality). In reality though folks across all kinds of cultures have all kinds of money they'll accept, where reasonings range from "I'm just happy to get any kind of money" to "I'm happy for my neighbor to receive this fortune and am not interested in taking it from them" to "If I take money from this person I am obligated to them" and so on.

[Guest]

Okay, sure, but the point I'm trying to make, by saying that seeing that result is "worth" more to me than the money offered is that it is still a form of economic rationality. In other words, it's not strictly that economics is wrong, it's that the model is wrong. The model fails to account for abstracts that have difficult to quantify and subjectively varying value, but it's not necessarily counter to economic thinking at its core.

[Guest]

Yes, but what if the experiment was repeated with 100 thousand or 100 million?

I'm thinking that the direct recipient will be a bit more cautious/generous. And the other person will be likely act very rationally. Also some mind games may happen before the exchange.

[Guest]

Agreed. I might not being willing to take $5 out of $100, but I would be more likely to take a million out of a billion even though it's a much smaller relative amount.

[walruss]

Agreed. I might not being willing to take $5 out of $100, but I would be more likely to take a million out of a billion even though it's a much smaller relative amount.

That's another question I have about the cross-cultural studies. Did they do them all with the same amount of money or did they adjust for cost-of-living/average wage?

As for your original point, when I read the studies on this, I find myself looking at the reject numbers more often than at the offer numbers. I think that's because it's my natural instinct to offer 50%, since I'm receiving a windfall and the other guy might as well too. However, my natural instinct is also to reject no amount, however small, because the chance to be spiteful is worth exactly $0 to me.

[Guest]

What about a penny? Forget spite, not having a penny is worth more to me than a penny.

[the op]

Guys, read the article.