Make Me An Offer I Can’t Refuse

From an early age we are told to share and be fair. Indeed we get upset if we receive short measure. Even monkeys get awkward if they are not getting an equal share of goodies with a colleague in captivity. Of course, this is under the supervision of a psychologist who is responsible for the inequity. In the wild, things may be different.

The psychologists are back testing humans and the device this time is a variant of the Ultimatum Game. In this game, the players are playing for a share of 10 coins. One player makes the other one of two offers and the other player has to decide to take it or leave it. If they take it, they get their share of the split, but if they reject it, neither gets anything.

The player making the offer is allocated one of these combinations to offer from: an 8:2 split with a 5:5 split, 8:2 with 2:8, 8:2 with 10:0 and an 8:2 with an 8:2. Each player only plays another once so there is no chance of payback. The aim of the game is for a winner to emerge as the person with the most cash.

Radke et al used a variant of this where their 50 human lab rats were under the impression that some of the offers were under computer control and the other under the control of another player (1). In fact, the computer made all the offers.

 Results?  Well, when the contestants thought that another player was making an unfair offer, they were more likely to reject it than if they thought it was the computer, thus inflicting some degree of punishment of the proposer. .(Punishing the computer didn’t seem to be a particularly good idea.) Of course both would suffer, but the proposer would loose more. This meant that the receiver would make a choice with the intention of the other player in mind.
The other point that the authors were trying to tease out was did the receivers take the context into account? For example, if they had an 8:2 split when they knew that the proposer had opted not to go for the 5:5 split, were they more or less likely to accept it when the other possibility had been a 10:0. Well, you guessed it, if they thought the proposer was offering the best deal, they were more likely to take it than if the context of the choice would have been less favorable to the proposer.

In the end everybody got an equal payout of €10, so I guess nobody really won. It’s good to see that the concept of fairness is still alive and well with 23-year old students. Hopefully they won’t loose it as the get immersed in the business world.


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