Monday, July 7, 2008

Ultimatum Game

I played the "Ultimatum Game" at a teacher's conference last year, except we only used 20 bucks in the game. I did something that seemed completely irrational and offered the other person $18 leaving only $2 for myself. Of course they accepted the offer, and everyone in the room thought I was an idiot (I am, but not because of that).

I explained that I wanted to make a random stranger happy and that was worth the $18 to me, but not $20. The reason I gave for keeping the $2 was so I could take the subway back to Grand Central Station.

Since the stakes in this game were so low I was willing to reverse what the article was explaining on fair deals. Additionally, I really just wanted to see if I could mess up the game's aim and confuse everybody, to simulate the average Econ student's participation.

So it really was not an irrational economic decision.

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