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Ultimatum, Human Rationality, and Goal Setting and Goal Attainment

People are irrational, as the game Ultimatum proves.  In Ultimatum, there are two players and a pot of booty.  Each player has total power to make one move, and there is no negotiation.  The first player gets to propose (only once) how to split the booty among the two players.  The second player gets to accept or reject the offer.  No counter-offers are allowed.  If the second player rejects the offer, both players leave with nothing.  In theory, the second player should always accept any offer.  After all, he went into the game with nothing.  If he accepts offer, he will leave with something.  Accepting the offer will always make the second player better off.Of course, the second player does not accept just any offer.  Instead, an offer must be "fair" before the second player will accept it...continue to full post

Full post as published by Crime & Federalism on January 04, 2009 (boomark / email).