Jim's Blog: Ultimatum Game

Showing posts with label Ultimatum Game. Show all posts

Ultimatums Again

Today we have a new slant on the games that are designed to examine people’s response to unfair or fair play when playing the ultimatum game. You’ll recall that this is the game where a “proposer” offers to split the change in his/her pocket with you, the “responder”. If you accept, you get your share. If you reject the offer the government takes the lot and you both loose out.

What makes the game a test is that the offers may be “fair” (50:50, 40:60) or “unfair” (30:70, 20:80 or 10:90). Those deep in game theories will know that the winner of the group playing the game should take all offers as something is better than nothing. Punishing someone who makes an unfair offer by turning down 10% so that the proposer looses their 90% is letting emotion run over your theoreticians logic.

The latest twist that we have this week is from Takahashi et al whose study is published in the Proceedings of the National Academy of Science (1). They took 20 young men and presented them with a stacked ultimatum game whereby a pre-programmed computer and not the other players made the offers to them.

But that’s not all. They were all given a PET scan where the interest was focused on the serotonin receptors in the Raphe nucleus (that’s at the top of the brain stem.) And there’s more. They were all given a psychiatric assessment of their personalities. Agreeableness or neurotic were the pigeonholes that their personalities were shoehorned into.

To put this together, low levels of serotonin meant the guys were honest and trustful, that is generally agreeable. High levels meant that they were more Machiavellian and consequently on the neurotic side.

What are your prejudices, I wonder? Agreeable guys would just take the hits and accept the offers, while our Machiavellian friends would do a bit of punishing if it was only going to cost them a 10% offer, but would deny the proposer their 90%, maybe?

Well, no. The nice guys were more outraged at being short-changed and punished hard because it was patently unfair. The Machiavellians just shrugged as it was just business and what’s fairness got to do with business? Guess they’re destined for Wall Street

http://www.pnas.org/content/early/2012/02/13/1118687109.full.pdf

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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.