Ultimatum Game

[jake-the-peg]

Listening to a program on Game theory - ended on this rather interesting one.

You're given £100 - you have to offer me some of it

If I accept you keep the change

If I refuse we both get nothing

How much are you going to offer me?

(No right answer to this just interested in people's perpectives)

[ludwig]

Obviously you can't know whether they'll accept the offer or not, but that's the offer I'd make every time. If they accepted 50/50 I'd be happy - if they didn't, I'd just think oh well, I got paired with an idiot - never mind.

[Seadragon]

Lol Ludwig...... This scenario, to me, is an example of Capitalism at work.

Emotions aside, you don't know me and I don't know you.

In effect, we actually both have nothing...but the power lies with the person who has the £100 to begin with. They are in a stronger bargaining position. It would rarely happen that the person with £100 would keep say £30 and part with £70? Actually they still make £30 quid out of it?

Say I have the £100, it is in my interest to keep as much of that as possible.

Jake mentioned 20%, so say after intense debating for about an hour, I put it to you that whether I leave with 80 quid or not makes no difference to me whatsoever but that you lose 20 quid, 20 quid which you don't have presently, then are you telling me that the majority of people would not as a final offer accept the £20 quid?

The bargaining power and ultimate gain is with the person who starts off with the £100?

[jake-the-peg]

I think I'm going to have to have a look and see if I can find any of the research papers on this.

Apparently some experiments were done in countries where the average wage is quite low and even when the sums of money involved were over a months wages people would still rather reject offers if they thought they were not being offered enough.

I think it's facinating because what you're seeing is people weighing up how far they think someone else's pride extends.

I wonder if there's a difference based on gender if it's M-F M-M or F-F subjects

[jake-the-peg]

Hmm

We explore the behavior of men and women in the ultimatum game. In one treatment, players remain mutually anonymous. In the second treatment, players’gender is common knowledge. Average offers made do not differ based on the gender of player 1. Offers are affected by the gender of player 2, with men attracting higher offers, particularly from female players 1. Players 2 of both genders choose a higher minimum acceptable offer when facing a female player 1. These patterns led to substantial differences in earnings. Such striking differences in expectations and decisions could impact salary negotiations and other real-world transactions.


The moral of the story seems to be get a man to do your negotiating - not because he'll be any better but your opponent will think he is!

[HowardKennitby]

The programme was 'In Our Time' on Radio 4. Should still be available if anyone wants to catch up.

[jake-the-peg]

it's on podcst to so you can download it or any of the previous programs

http://www.bbc.co.uk/podcasts/series/iot

I must admit to being a bit of an addict

[jno]

the Ed posted a link on the previous page, which I haven't listened to

[Seadragon]

Also I read yesterday that if a waitress wears red lipstick, she is more likely to get a higher tip than those who chose paler colours and blondes get tipped more than brunettes. However this is only relevant to male tipsters, women tipped the same regardless.

[Seadragon]

By the way Jake, I don't know if you have heard of Filip Spagnoli, statistian? Since you mentioned researching, he is quite good and his blog P.A.P Blog if you click on stats left hand side offers loads of statistics on various topics from poverty to discrimination to capital punishment etc.....I just thought if you not come across him, his site is very good and very interesting.