Steven D. Levitt Quote
To an economist, the strategy is obvious. Since even a penny is more valuable than nothing, it makes sense for Zelda to accept an offer as low as a penny—and, therefore, it makes sense for Annika to offer just a penny, keeping $19.99 for herself. But, economists be damned, that’s not how normal people played the game. The Zeldas usually rejected offers below $3. They were apparently so disgusted by a lowball offer that they were willing to pay to express their disgust. Not that lowball offers happened very often. On average, the Annikas offered the Zeldas more than $6. Given how the game works, an offer this large was clearly meant to ward off rejection. But still, an average of $6—almost a third of the total amount—seemed pretty generous. Does that make it altruism? Maybe, but probably not. The Ultimatum player making the offer has something to gain—the avoidance of rejection—by giving more generously. As often happens in the real world, seemingly kind behaviors in Ultimatum are inextricably tied in with potentially selfish motivations.
To an economist, the strategy is obvious. Since even a penny is more valuable than nothing, it makes sense for Zelda to accept an offer as low as a penny—and, therefore, it makes sense for Annika to offer just a penny, keeping $19.99 for herself. But, economists be damned, that’s not how normal people played the game. The Zeldas usually rejected offers below $3. They were apparently so disgusted by a lowball offer that they were willing to pay to express their disgust. Not that lowball offers happened very often. On average, the Annikas offered the Zeldas more than $6. Given how the game works, an offer this large was clearly meant to ward off rejection. But still, an average of $6—almost a third of the total amount—seemed pretty generous. Does that make it altruism? Maybe, but probably not. The Ultimatum player making the offer has something to gain—the avoidance of rejection—by giving more generously. As often happens in the real world, seemingly kind behaviors in Ultimatum are inextricably tied in with potentially selfish motivations.
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