COGS 100 Lecture Notes - Lecture 11: Ultimatum Game, Behavioral Economics, Reciprocal Altruism
30 Oct 2017
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The study of economic decision making and the factors that affect it. Classical view is that people are rational and always make choices that increase their money or value. In reality the way we think about money is affected by heuristics and evolution. How would you split ,000 with someone else> Your partner would refuse to accept up until a split of about 70-30 (camerer, In small societies reciprocal altruism is the rule. If you cheat someone now, they will probably cheat you later. You are on a team of experts that must decide what course of action to take in preventing a flu outbreak. There is a one-third probability that 600 people will be saved, and a two-thirds probability that no people will be saved. A full 72% of the participants in one experiment chose option a. Now consider the following re-wording of the question:
