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The Complete Idiot's Guide to Game Theory by Edward Rosenthal, Ph.D., Edward C. Rosenthal

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Behavior in the Ultimatum Game

I introduced the Ultimatum game to you in Chapter 17. Remember how it works: there are two players and a given sum of money, say $10, to be shared, provided the players agree on the outcome. Player 1 offers some of the $10 to Player 2. Player 2 either accepts, in which case the money is parceled out and the game ends; or Player 2 rejects the offer, and the game ends with neither player getting anything. We learned that when people feel insulted by a low offer, their disgust is clearly registered by fMRI scans.
Note that the Dictator game is a one-sided Ultimatum game in which Player 2 does not get the opportunity to play. Behaviorally, we should expect a big difference between these two games. In the Dictator ...

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