Ultimatum Game


A quote from wikipedia:
"The ultimatum game is an experimental economics game in which two
parties interact anonymously and only once, so reciprocation is not an
issue. The first player proposes how to divide a sum of money with the
second party. If the second player rejects this division, neither gets
anything. If the second accepts, the first gets her demand and the
second gets the rest."

I would divide like this: I would take 50% of the money, because
2nd player
cant hope more than 50%. I would give 50% of the remaining to the 2nd
player, because
I cant hope to get more than 50% of the remaining. Continuing like this
I get 2/3 and 2nd player 1/3 of the money. How fair is the division?
Game theory predicts that one should give as little as possible to
the 2nd player, if
the players are rational. Simulations with people suggest fairly even
divisions. Assume
that there is one more dollar to divide and already 1st player has 500
and 2nd player 250. It seems that 1st player has a lot more to lose
than 2nd player, so I would expect 1st player to hesitate, before
trying to keep the last dollar himself.
Rationally it seems that 1st player takes as much as possible, as
it is rational for
the 2nd player to accept unfair division, but I think it is not 1st
player's best interest to
propose unfair deal.

.

Relevant Pages

  • Re: Hello to the mellow... new lurker and a story about Magnolia Red
    ... run two racks in a row before my back retires my game ... A Player was a guy who knew the game well enough to ... could not Play, and always tried to get a spot from ... always needed a backer to put up the money - on his own ...
    (rec.sport.billiard)
  • Re: Hello to the mellow... new lurker and a story about Magnolia Red
    ... run two racks in a row before my back retires my game ... A Player was a guy who knew the game well enough to ... could not Play, and always tried to get a spot from ... always needed a backer to put up the money - on his own ...
    (rec.sport.billiard)
  • Poker Strategies Teil 1 Author Selzer-McKenzie
    ... Texas Hold’m Poker Secrets and Strategy ... deals around until each player has two cards face down. ... If there is more than one player left in the game at the end, ... The second round of betting (after the flop) is in units ...
    (de.etc.finanz.misc)
  • Re: Hello to the mellow... new lurker and a story about Magnolia Red
    ... "Good enough to win money, not good enough to make it." ... run two racks in a row before my back retires my game ... capital P. "So-and-so can Play but his brother can't ... A Player was a guy who knew the game well enough to ...
    (rec.sport.billiard)
  • Re: I played 9 people on BGM today for $2.50 a point
    ... If I played a game with someone as skilled as you or Neil, ... If I am playing recreationally, ... or play money on FIBS, TMG, even BSW, but if there's any money on the line, ... There are two types of backgammon player. ...
    (rec.games.backgammon)