What are the three conditions of the ultimatum?
The proposer makes a fair offer; the responder would only accept a fair offer. The proposer makes an unfair offer; the responder would only accept an unfair offer. The proposer makes an unfair offer; the responder would accept any offer.
What is the optimal play in the ultimatum game?
The optimal play in the ultimatum game is straightforward: The allocator should propose a division of the money in which the allocator receives $19.99 and the recipient receives $0.01. The allocator has maximized his or her gain.
What does the ultimatum game show?
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.
Is the Ultimatum Game is a simultaneous game?
It is a one-shot game covering the behavior of one responder with one or two proposers. Each participant provides answers for all cases in both roles. The one-shot game divides into two blocks: first the standard ultimatum game and second its simultaneous as well as sequential expansions (compare Table 1).
Who invented Ultimatum Game?
The ultimatum game (UG), introduced by Güth et al. (1982) in a classic article published in this Journal, depicts a two- person bargaining situation. Player 1 proposes a division of a sum of money.
Why might the multiple play Ultimatum Game have a different result than the single play Ultimatum Game?
Why might the multiple-play ultimatum game have a different result than the single-play ultimatum game? The multiple-play ultimatum game allows for players to send signals. Therefore, the receiver can punish a player who doesn’t share enough.
Who originally designed the Ultimatum Game?
Werner Guth
The Ultimatum Game, introduced by Werner Guth and colleagues (1982), is a simple, take-it-or-leave-it bargaining environment. In ultimatum experiments two people are randomly and anonymously matched, one as proposer and one as responder, and told they will play a game exactly one time.
Who came up with the Ultimatum Game?
What does Standard game theory assuming selfish payoffs predict about the Ultimatum Game?
“The ultimatum game results . . . Game theory predicts that since both the proposer and the responder know that rejection of the offer results in neither receiving any money, the proposer will offer the smallest possible amount (anything greater than $0) and the responder will always accept.
Is the Ultimatum Game a sequential game?
The Ultimatum Game is a famous asymmetric, sequential two-player game intensely studied in Game Theory. She is to offer any part of it to the second player, called the “responder”. The responder can choose between two strategies: to accept or to reject.
Is the ultimatum game is a simultaneous game?
How do you play the ultimatum game?
The ultimatum game is a simple strategic situation between two people. One person, called the proposer, divides a fixed amount of money into two parts. This division is presented to the second person, termed the responder, as a ‘take it or leave it’ offer (hence the name ‘ultimatum’).
What percentage of offers are rejected in Ultimatum games?
Hundreds of ultimatum games conducted by scores of researchers have produced the following results: The mean split is 60\% / 40\% (meaning that in a $10 game, the proposer offers the responder $4 and keeps $6). The modal (most common) offer is a 50\%-50\% split. Approximately 20\% of low offers are rejected.
What is an ultimatum situation?
The situation places the monetary interests of two people into close association ( Güth, Schmittberger, & Schwarze, 1982 ). In a standard Ultimatum game, there is an amount of money that can be split between two players, a proposer and a responder. Often a sum of 10 dollars is used.
How do you do an ultimatum experiment?
In ultimatum experiments two people are randomly and anonymously matched, one as proposer and one as responder, and told they will play a game exactly one time. The proposer is endowed with an amount of money, and suggests a division of that amount between herself and her responder.