BE 03 Diverse Motives -- Social Norms.pptx

# You are the allocator 100 is on the table you decide

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You are the ALLOCATOR . \$100 is on the table. You decide how to split it between yourself and one other person. Person 2: You are the RECEIVER . You get an offer and decide whether to accept. IF THE RECEIVER ACCEPTS THE OFFER, BOTH GET THE MONEY.

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Let’s try it.
You are playing a game with a stranger whom you will never meet face to face. You have been given NTD\$100. You can offer part of it to the other person. Any amount (0 to 100) is okay. BUT, if the other person does NOT accept your offer, both of you get NOTHING. How much will you give to the other person? QUESTION FOR ALLOCATOR

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You are playing a game with a stranger whom you will never meet face to face. She/he has been given NTD\$100 and will offer some to you. If you accept, both of you get the money, according to the offer. If you do NOT accept, NEITHER OF YOU GET ANY MONEY. Would you accept \$1? Yes__ No__ Would you accept an \$10? Yes__ No__ What is the lowest offer that you would accept? NTD\$ _______ QUESTION FOR RECEIVER
What does the SELF INTEREST RCM predict will happen? According to the SELF INTEREST RCM, what should Person 1 do? Person 2? QUESTION FOR GROUPS

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Person 1 should offer \$1 to Person 2, and keep \$99. Person 2: The choice is \$1 or nothing and \$1 > \$0. So, Person 2 should accept. According to the SELF INTEREST RCM...
u l t i m a t u m s t u d e n t r e s u l t s

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Version A: You are the RECEIVER. You get an offer and decide whether to accept. Version B: You are the ALLOCATOR. You make the offer. U L T I M A T U M
Would you accept an offer of \$1? Yes = 9 (22%) No = 32 (78%) (Does this mean that 78% of you are IRRATIONAL?) Results (Joe’s students, earlier class)

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Would you accept an offer of \$10? Yes = 19 (45%) No = 23 (55%) (Does this mean that 55% of you are very IRRATIONAL?) Results (Joe’s students, earlier class)
What is the lowest offer that you would accept? AVERAGE = NTD\$ 47 Results (Joe’s students, earlier class)

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4. You are playing a game with a stranger whom you will never meet face to face. You have been given NTD\$100. You must offer him some. If he accepts your offer, both of you get the money, according to your offer. If he does NOT accept your offer, NEITHER OF YOU GET ANY MONEY. How much would you offer? NTD\$ 70 Why so much? Results (Joe’s students, earlier class)
u l t i m a t u m t h e r e s e a r c h

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Person A – Allocator: Average Offer = .37 of total, or \$37 Most common (‘modal’) offer = .50, or \$50 Person B – Receiver: 5 of 21 offers were rejected. (Usually low offers.) Question for YOU: Why? Guth, Schmittberger, and Schwarze (1982)
Receiver: Why does the receiver reject low offers? Even when she or he will never play with the same person again? ULTIMATUM RESULTS – Why?

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YES. This experiment has been replicated many times. The prediction of the Self Interest RCM is WRONG . Has this finding proven robust?
What happens if you cheat a monkey? ysCg From Franz de Waal, Moral Behavior in Animals TED Talk

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Receiver: Rejects unfair or ‘insulting’ offers.

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