What was the main point of the ultimatum game that we discussed in class?
The Ultimatum Game is a two-person, multiple-strategy game widely used in the experimental social sciences to demonstrate the human propensity for costly punishment in response to inequitable treatment. The game serves to provide quantitative evidence for a diversity of fairness norms across cultures.
What are the three conditions of the ultimatum?
The proposer makes a fair offer; the responder would only accept a fair offer. The proposer makes an unfair offer; the responder would only accept an unfair offer. The proposer makes an unfair offer; the responder would accept any offer.
What is the dictator game in economics?
The Dictator Game is an economic game that is designed to question the standard economic assumption that individuals will act solely out of self-interest. This is done by presenting real-life data of otherwise rational individuals acting in a manner that runs counter to the predictions of economic assumptions.
What does the dictator game tell us about fairness?
The results – where most “dictators” choose to send money – evidence the role of fairness and norms in economic behavior, and undermine the assumption of narrow self-interest when given the opportunity to maximise one’s own profits.
What is the meaning of Nash equilibrium?
More specifically, the Nash equilibrium is a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from their chosen strategy after considering an opponent’s choice.
What is the sub perfect Nash equilibrium in your ultimatum game?
The Ultimatum Game is a paradigmatic two-player game. A proposer can offer a certain fraction of some valuable good. A responder can accept the offer or reject it, implying that the two players receive nothing. The only subgame-perfect Nash equilibrium is to only offer an infinitesimal amount and to accept this.
When a responder rejects a positive offer in the ultimatum game?
If they do not agree and the responder rejects the proposer’s offer, then nobody receives any money. For example, let’s imagine that a round of the Ultimatum game is going to be played by Joshua and Dominic. Joshua is the proposer and will have a chance to split 10 dollars with Dominic.
What is the connection between the ultimatum game and fairness norms?
Traditional, deterministic models of evolutionary game theory agree: in the one-shot anonymous Ultimatum Game, natural selection favors low offers and demands. Experiments instead show a preference for fairness: often responders reject low offers and proposers make higher offers than needed to avoid rejection.
What is a trust game in economics?
The Trust Game, designed by Berg et al. (1995) and otherwise called “the investment game,” is the experiment of choice to measure trust in economic decisions. The experiment is designed to demonstrate “that trust is an economic primitive,” or that trust is as basic to economic transactions as self-interest.
What is the Nash equilibrium in the dictator game?
The Nash equilibrium in a dictator game is for the proposer to keep all the money for himself. The sub-game perfect Nash equilibrium in an ultimatum game is for the receiver to accept any positive offer and so for the receiver to propose the smallest possible amount.
How is the dictator game different than the ultimatum game quizlet?
The ultimatum game has the proposer making a take-it-or-leave-it offer to the responder. If the responder accepts the offer is carried out. If the responder rejects then both players receive zero. The dictator game removes the responder’s option to reject an offer.
What do we learn about human behavior by looking at the outcomes of the dictator game and the ultimatum game?
The behavior we looked for in the Dictator Game was altruism. In the Ultimatum Bargaining Game, we looked for behavior consistent with altruism and strategy. In the Trust Game, we looked for behavior consistent with altruism, strategy, reciprocity, and trust.
What is an ultimatum game in economics?
Ultimatum game. Extensive form representation of a two proposal ultimatum game. Player 1 can offer a fair (F) or unfair (U) proposal; player 2 can accept (A) or reject (R). The ultimatum game is a game that has become a popular instrument of economic experiments.
What is a game in economic experiments?
A game in economic experiments. Extensive form representation of a two proposal ultimatum game. Player 1 can offer a fair (F) or unfair (U) proposal; player 2 can accept (A) or reject (R). The ultimatum game is a game that has become a popular instrument of economic experiments.
Do values drive punishing decisions in an ultimatum game?
Perhaps the best piece of evidence so far that values drive punishing decisions in an ultimatum game comes from a recent fMRI study investigating the neural differences between individuals that differ in social value orientations (see also Section 4.2.1 ).
Can evolutionary game theory explain fair behavior in the ultimatum game?
Other authors have used evolutionary game theory to explain behavior in the ultimatum game. Simple evolutionary models, e.g. the replicator dynamics, cannot account for the evolution of fair proposals or for rejections. These authors have attempted to provide increasingly complex models to explain fair behavior.