Nanda_Chapter6mod

Nanda_Chapter6mod - Chapter 6 Economics Ultimate Dictator...

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Chapter 6 Economics
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Ultimate Dictator The notion that human beings are “economic men” underlies much of Western economic theory. The idea that people are capable of assessing their economic choices and making decisions that maximize their wealth and minimize their labor
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Ultimate Dictator Economists and anthropologists developed tools to test the degree to which people in different cultures behave like the “economic man” of the theory. Examples: Dictator game Ultimatum game
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Dictator Game Two individuals: “proposer” and “responder.” The proposer is given a sum of money and told to split it with the responder. If people try to maximize their wealth and minimize their work, we would expect the proposer to keep the entire sum.
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Dictator Game In the United States and other wealthy nations, 30 to 40% of the players take the whole pot. Most proposers leave between 20 and 30% for the responders.
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Ultimatum Game In this game, the proposer offers to split a sum of money and the responder may either accept or reject the split. If the responder accepts the split, the money is divided and the game is over.
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Ultimatum Game If the responder rejects the split, neither player receives any money and the game ends. A respondent who behaved like “economic man” would accept the offer since accepting the offer involves no financial cost and even a very low offer is greater than nothing.
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Ultimatum Game Anthropologists and economists have played the ultimatum game with members of many different cultures. The results showed large variations. Among the Machiguenga of the Peruvian Amazon, proposers rarely offered more than 15% and offers were almost never rejected. American college students offered 42-48% and responders tended to reject offers of less than 30%.
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Ultimate Dictator The results of the dictator and ultimatum games demonstrate the social and cultural dimensions of economic decision making. The fact that a strong majority of proposers give responders something may show that all people have a bias toward generosity. The differences among cultures demonstrate that decisions are set in cultural contexts that determine behavior and these are different in different economic systems.
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Economics The study of how the choices people make determine how their society uses resources to produce and distribute goods and services
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Economic System The part of society that deals with production, distribution, and consumption of goods and services The way production is organized has consequences for the family and the political system. Economics is embedded in the social process and cultural pattern.
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Economic Behavior Choosing a course of action that pursues the course of perceived maximum benefit
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Allocating Resources Each society has rules to regulate access to resources.
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This note was uploaded on 11/07/2011 for the course ANTH 1003 taught by Professor Demovic during the Spring '07 term at LSU.

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Nanda_Chapter6mod - Chapter 6 Economics Ultimate Dictator...

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