The Ultimatum Game and Human Behaviour

The ultimatum game is an economic experiment in which two players interact to decide how to divide a sum of money that is given to them. The first player proposes to divide the sum between the two players, and the second player can either accept or reject this proposal. If the second player rejects, neither player receives anything. If the second player accepts, the money is split according to the proposal. The game is played only once so that reciprocation is not an issue.

By pure logic a recipient should accept any offer as if they turn it down they will get nothing, however in practice when a player low balls the other offering 10% / 20% of offers are often refused as their is a human trait that would rather go without than see another human come out of a situation better than they.

This experiment can be broadened further to show how humans are will to put more effort in keeping something they already have than they are will to put effort into achieving something that they don’t have but could get with equal effort.

Could this be the reason that people who run businesses feel the immense need to grow and expand, know that by standing still they would be loosing ground, but those that talk and dream of taking the first step to starting their business never get off the starting blocks?

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