Comment by samatman
2 years ago
> It turns out you _could_ screw them over and they'd
End up with a dollar in their pocket which they otherwise wouldn't have.
The Ultimatum game is a useful insight into human psychology: for one thing, it tells us who thinks that the defector in this equilibrium is better off than a counterfactual cooperator.
Ah, but they have their pride! Ok. My pride is not affected by someone else having 99 bucks they didn't earn, and myself $1 likewise. Maybe that other fellow really needed the money.
I don't know what the hell you're talking about. Your argument is incoherent. If you wanted to allocate the money according to the individual's utility of money, then a rule of thumb of $1 is going to be wrong. You should, given no information, assume that both have the same utility of money and that the utility of money is diminishing, favouring an even split.
Indeed. You’re very wise!