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Author Topic: The Ultimatum Game  (Read 17482 times)
gareth69
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May 27, 2011, 06:53:56 PM
 #161

I think the whole problem of game theory as Psychological Science is now finding is that,

*Man is a rationalizing creature as opposed to a rational creature*

You can read on cognitive dissonance theory here.

http://en.wikipedia.org/wiki/Cognitive_dissonance

If humans were rational why would they smoke? It costs you money, makes you sick, possible makes you pay high health costs, and possibly kills you. What is the game theory explanation of why people smoke? There are other also countless examples such as gambling, where people countinue to play a game where it is mathematically rigged against them, people who continue eating, drinking after warnings from the doctor, people outbidding each other on ebay until they pay more than list...on and on.

A *rationalizing* being would rationalize away smoking.

"I will give up next year."
"My uncle lived until he was 90, and he smoked."
"Meh, the harmful effects are exaggerated."

There are an almost limitless ways in which the human mind rationalizes things, as opposed to being rational about them.

In my case, I would NOT accept the $10 to ensure that you get Zero. Now you may think this as irational? However, you now know something about my character. How will you treat me in a future deal? What if there is a second round? What if there is a another game at some point in time in which I get to choose? If somone offered my a mere $10, I would mentally class them as a "tool", somone not to do business with, and not to be trusted; you could possible cut yourself off from any future profits in our relationship by being a "w*nker. So in the bigger picture there's also an element of the "prisoners dilema" for you. On the other hand, if somone was stupid enopugh to accept $10 while I got $4990, I was class them as a "muppet", likely I would try to encourage them to be more of a muppet to see if I could derive more income from them.

So in addition to a lot of people not being rational, even a rational person may look at the biggure picture, the game of real life is a lot more complicated than can be encapsulted in a simple "game". The whole problem with game theory and where it falls down, is that simple scenarios are taken as axiomatic, and in Tohmas Aquinas fashion, you can build a massive logical edifice on these so called "axioms"; what in computer science would be called "garbage in garbage out".
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Anders
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May 27, 2011, 07:08:57 PM
 #162

There are an almost limitless ways in which the human mind rationalizes things, as opposed to being rational about them.

True and we have to ask ourselves: which is the rational way? We are all separate individuals. At the same time we are a part of the whole. Rational choices are those that work in harmony with the whole. It's as simple as that. Being selfless is not rational, because then I disregard myself. Such disregard will cause friction between myself and the world. Nor is being selfish rational unless the selfishness encompasses the whole. Because that will also lead to friction. The rational approach is to care for both myself and others. Without such care there will be friction, like an engine not functioning well.

Then how to make such rational choices? Use both your mind and your heart.

Dobrodav
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May 27, 2011, 11:34:02 PM
 #163

 Rationalizing creature,  rational creature...
Just try to make me look silly and i will send both of us in hell !

That principe did work well in times of cold war.

Alex Thornton
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May 28, 2011, 11:12:36 PM
 #164

Here is another way to look at it: Would you to pay $10 out of your pocket to destroy $4990 of someone else's money?

The example above would be considered cruel by some. Yet the same people would argue that declining the deal in the first post is perfectly ethical.
BitterTea
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May 29, 2011, 01:06:46 AM
 #165

Here is another way to look at it: Would you to pay $10 out of your pocket to destroy $4990 of someone else's money?

The example above would be considered cruel by some. Yet the same people would argue that declining the deal in the first post is perfectly ethical.

That's not a good analogy. In this case, they know that their money hinges upon you accepting the offer. Offering an unequal distribution carries a higher risk of rejection, but higher potential for reward.
Alex Thornton
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May 29, 2011, 06:59:15 AM
 #166

Here is another way to look at it: Would you to pay $10 out of your pocket to destroy $4990 of someone else's money?

The example above would be considered cruel by some. Yet the same people would argue that declining the deal in the first post is perfectly ethical.

That's not a good analogy. In this case, they know that their money hinges upon you accepting the offer. Offering an unequal distribution carries a higher risk of rejection, but higher potential for reward.

I don't see the problem with the analogy. In both cases, you are net $10 worse off and the other person is $4990 worse off. The ethics of the transaction are all a matter of perspective.
barbarousrelic
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May 29, 2011, 11:30:23 AM
 #167

Here is another way to look at it: Would you to pay $10 out of your pocket to destroy $4990 of someone else's money?

If a person had offended me, yes, I would.

Also note that in the scenario, the $4990 doesn't belong to the other person until the game is over with my having accepted their agreement, so the questions on the morality of destroying someone else's property are not applicable.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
fadisaaida
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May 29, 2011, 12:08:40 PM
 #168

If played the game and i received an offer of 10$, i will not take it. Just because the guy who made the offer had the 1st call does not make him more worthy, he is responsible as i am for a good deal for both, i would not take it cause in my book it is not fair. i might accept a less than 50/50 offer just to get out of something but it all end up how much money being offered represents to me!

for example:

he offer me 4 out of 10 ---> probably i will reject it.
he offer me 40 out of 100 ---> i might accept it.
he offer me 400 out of 1000 ---> i probably will take it.
he offer me 4000 out of 1000 ---> i most certain will accept it.
he offer me 100,000, out of 100,000,000 --> 100% will accept

bottom line it all boil down to how much i appreciate fairness in this word and how much of a value i give it.

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Alex Beckenham
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May 29, 2011, 12:35:48 PM
 #169

Okay I'm going to put up 1 BTC to try this for real.

This Ultimatum game offer is for Bituser and fadisaaida.

Bituser, I will give you 1 BTC if you and fadisaaida can agree how to split it.

You can make ONE offer to fadisaaida only, right here in this thread (no cheating via PM!).

If fadisaaida accepts, I will send the coin to both of you based on the split you propose.

If fadisaaida declines, neither will get any coins from me.

fadisaaida
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May 29, 2011, 12:52:14 PM
 #170

Okay I'm going to put up 1 BTC to try this for real.

This Ultimatum game offer is for Bituser and fadisaaida.

Bituser, I will give you 1 BTC if you and fadisaaida can agree how to split it.

You can make ONE offer to fadisaaida only, right here in this thread (no cheating via PM!).

If fadisaaida accepts, I will send the coin to both of you based on the split you propose.

If fadisaaida declines, neither will get any coins from me.


damn now this is not fair i have a weakness for bitcoins, Tongue

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tomcollins
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May 29, 2011, 12:57:59 PM
 #171

If played the game and i received an offer of 10$, i will not take it. Just because the guy who made the offer had the 1st call does not make him more worthy, he is responsible as i am for a good deal for both, i would not take it cause in my book it is not fair. i might accept a less than 50/50 offer just to get out of something but it all end up how much money being offered represents to me!

for example:

he offer me 4 out of 10 ---> probably i will reject it.
he offer me 40 out of 100 ---> i might accept it.
he offer me 400 out of 1000 ---> i probably will take it.
he offer me 4000 out of 1000 ---> i most certain will accept it.
he offer me 100,000, out of 100,000,000 --> 100% will accept

bottom line it all boil down to how much i appreciate fairness in this word and how much of a value i give it.

Actually, because he acts first, he is 100% more worthy.

This is like saying I bought a lottery ticket, another guy did too, and he won $1,000,000.  But I get the veto power where if he doesn't give me a "fair" amount, I can make sure his money gets destroyed.
fadisaaida
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May 29, 2011, 01:13:13 PM
 #172

tomcollins: i reached page 3 on this page and i saw already few of your examples which are in my opinion focus only on 1 part of the issue. you are focusing on the guy who make the final decision and you seem to ignore the fact that, the winning/loose outcome depends on 2 people, so just because one come after another does not mean any is less significant. the fact the 1st person who make the offer has the knowledge that his offer is not final until he get the approval of the second person should make it in his best interest to make a fair offer. now if it happens and the offer is not fair, it boils down to how much of "taking the high road" and the stake of the offer that the 2nd person is willing. each of us has different factors that will influence this decision (pride,stubborn,fairness definition,financial status, etc..)


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Anders
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May 29, 2011, 01:33:36 PM
 #173

How about the strategy to accept the offer if it's within 50% - 25%? If the offer is smaller than 25% then the other person is way too greedy in my opinion. But why reject 51%? What's the logic behind that? Because what if the person making the offer is a complete jerk? And that he or she only gives me 51% so that after the deal I would be called greedy. Grin I don't want to give people that option. He he.
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May 29, 2011, 10:41:29 PM
Last edit: May 29, 2011, 10:58:43 PM by Bituser
 #174

Okay I'm going to put up 1 BTC to try this for real.

This Ultimatum game offer is for Bituser and fadisaaida.

Bituser, I will give you 1 BTC if you and fadisaaida can agree how to split it.

You can make ONE offer to fadisaaida only, right here in this thread (no cheating via PM!).

If fadisaaida accepts, I will send the coin to both of you based on the split you propose.

If fadisaaida declines, neither will get any coins from me.


Ok, I'll bite. Normally I would offer a 0.5 to 0.5 split (because i am conserative with money and want the best chance to take something home). But I assume Alex Beckenham wishs to test fadiaaida...


I offer 0.35 BTC to fadiaaida and 0.65 BTC to myself.


he offer me 4 out of 10 ---> probably i will reject it.
I assume these are in dollars.

So by your first post, you should "probably reject it". I am curious what you will pick  Grin.


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May 29, 2011, 11:34:47 PM
 #175

I offer 0.35 BTC to fadiaaida and 0.65 BTC to myself.

Quoting this so it can't be edited Smiley

I am curious too, about a few different aspects of it.

tomcollins
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May 30, 2011, 02:18:04 AM
 #176

tomcollins: i reached page 3 on this page and i saw already few of your examples which are in my opinion focus only on 1 part of the issue. you are focusing on the guy who make the final decision and you seem to ignore the fact that, the winning/loose outcome depends on 2 people, so just because one come after another does not mean any is less significant. the fact the 1st person who make the offer has the knowledge that his offer is not final until he get the approval of the second person should make it in his best interest to make a fair offer. now if it happens and the offer is not fair, it boils down to how much of "taking the high road" and the stake of the offer that the 2nd person is willing. each of us has different factors that will influence this decision (pride,stubborn,fairness definition,financial status, etc..)



I'm focusing on the 2nd guy because the decision is already made by the time it got to him.  He chooses to accept or reject.  He can get butthurt about it and screw himself to screw the other guy over more, or he can act like a man and not.

See, what makes you think a fair offer is an even one?  That's what your problem is.  You are assuming it's their money to split.
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May 30, 2011, 01:03:43 PM
 #177

It appears, when the person trying to split the money he/she never even considers to give the other person more than himself/herself. Like in a 49.999/50.001 split.  There are obvious motives for this, but what would the your reaction be if someone offered you a bigger share of the cut?  I personally would first believe I was being scammed double check and triple check the circumstances then take the money cautiously while wondering what in the world this guy/girl is thinking.

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May 30, 2011, 01:26:16 PM
 #178

All the problem of Ultimate game is there:
If you let that happens once (unfair share distribution).
 - It will happen again.
If you do not want that will happen again
 - don`t let  it happen now.

It`s like Democracy, in rough terms.

And that raises question on Patriotic act again (by the way).

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May 30, 2011, 02:24:21 PM
 #179

I offer 0.35 BTC to fadiaaida and 0.65 BTC to myself.

Quoting this so it can't be edited Smiley

I am curious too, about a few different aspects of it.


OMG To be honest i didn't think i will hesitate in making my decision but seems like i did, I will reject it just cause im stubborn and it still not worth to invalidate my previous statement, but im gonna be honest and say that i though it will be far easier to reject in such small amount but i was wrong, it is not, a lot of thinking happened in the few seconds i decided , examples :


1. hah ( if i accept then i will look like a fool with my previous statement
2. it is free moeny so rejecting it will be STUPID
3. is it worth taking 0.35 even if it is not a fair ammount

so basicly my statement still stand for "it all boil down on principle/personal triats against "stake" that will determine the willingness of someone to bend fair/not fair rules"

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May 30, 2011, 04:05:09 PM
 #180

Didn't read all yet, but I think it depends.
If we were the only 2 people in the world, no way Jose.
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