What's the ultimatum game?

It's going great, Josh. You I'm doing pretty good. I'm doing pretty good. I've often wanted, Chuck, if you won the lottery, like, who would you share any of your proceeds with? I mean, would you? Obviously your wife Emily would would reap the benefits of this um, But I mean, is there anybody else, like your parents? Would you buy him a boat? Or you know who would you share it with? In in what amount? Have you ever thought about that? Yeah? Yeah, I think everyone kind of thinks

about this. I don't play the lottery, first of all, because I think it's a suckers game. But if I found a lottery ticket and won a lot of money, I would be pretty generous, I thinky okay. I've always liked to think the same thing, um to the to the to the point where you know, I kind of have allotments of like, you know, who would get what based on how much I won? Um. The thing is, it's all kind of esoteric at this point. Everyone's generous in theory. Yeah, and I wonder how much that would

change with cash in hand. Um. And I was actually reading an article about a guy who's in Melbourne who this actually happened to. Uh. One of his friends off handedly suggested, uh, he buy a lottery ticket, and the guy went in, bought it and actually won thirteen million dollars. He's got the money in hand and he's still sharing it with his buddy who just suggested he buy a ticket.

You know. So, um, it is nice. But at the same time, uh, this guy's actions flying in the face of all theories and all sorts of different disciplines evolution, economics, games, Arie. Have you heard of this guy named Ariel Rubinstein? I have I like all Ariel, do you? Yes? He seems like a pretty approachable guy from what I understand that he came up with this thing called the ultimatum game in the early eighties. I think, yeah, something like that,

uh and he UM. Let me just give a quick rundown of the ultimatum game, okay, okay, So basically, uh, some guy comes up to you and I chuck and uh hands uh hey, hands you twenty one dollar bills and he says yeah. I'd say, chuck, come back, and that guy would be like, where what's your friend's name? And I'd be all like, I don't know, I don't know him. You know, I just met him at number sixteen bus shelters. Somebody would get those one dollar bills, right. So, well,

let's say you did stick around. Your curiosity was peaked because some stranger came up and gave you twenty one dollar bills UM, and he had some instructions that went along with it, UM, namely that you had to split it with me in any way you saw fit. I had the ability need to reject any offer you gave me. But if I reject your offer, then neither one of us gets squat. He takes the twenty bucks back, right right,

So I could give you a dollar keep nineteen. You could say no, thanks, jerk, and uh, the guy takes his money back. Right. But the thing is under under this thing called rational maximization, which is an economic theory that basically all people are out for the most for themselves. You shouldn't even be concerned with the idea that I would reject your offer. Number one, you should give me one dollar because that's the least amount you have, right um.

And secondly I should take it. It's found money, and that should be that you got nineteen I've got a dollar. I may be mad at you, but still I didn't do anything for the buck, right, Um, So that makes perfect sense in theory. Uh. And Ariel Rubinstein is very very well respected game theorists, except for this one. Just magnificent. Uh, just terrible predictions. Right, This is a blot on his record. Right.

So these German economists put it to the test, put the ultimatum game to the test in real life, and they found that they're they're what they What they found was that there was no support for Rubinstein's hypothesis whatsoever. Right, people, I think they found gave an average of thirty seven percent of the money away. And then what I thought was really interesting was that half of the people who uh received um or less would not accept it. They

rejected the offer even though it was found money. And and in other cases there's there were more generous offers than there needed to be. Right. So if they got uh, let's say it was twenty deutsch marks, I guess now the euro, but back then it was deutch marks, they would give them three and they just threw it right back in his face exactly. Um, that doesn't make any sense again, right, So it was enough to get the curiosity of economists and mathematicians and and uh, you know

all sorts of other people uh peaked right, um. And so they started looking into this and they're like, well, game theory, it makes sense, but there's there's a flaw here there. Let's tweak it a little bit. They tried variations, right, and one of the ones that they came up with was the Dictator game. Right. I like this one, Yeah, this this one makes a little more sense to me.

And yet it's still just it doesn't make any sense. Basically, under the Dictator game, it's the same thing as the Ultimatum game, except uh, they give me twenty bucks to share with you. I can either take two dollars and give it to you and keep eight team for myself, or I can half the twenty dollars with you and and and split it equally. Either way, you have to accept the offer and I get to keep the money no matter what. So there's there's there's no loss for me.

And yet they found that like seventy six percent of the people who played the Dictator game split the twenty bucks in half, even though they knew that if if they gave the other person two bucks they got they kept eighteen. And as far as I know, these people are actually keeping the money to make this a very real thing, to really gauge people's reactions, and and the vast majority of the people were splitting things evenly. This

is mind boggling, don't you agree it is? But you know it was Germany and it's called the Dictator game, so that if they made a little bit of afraid on what was to convert exactly with their rib turtleneck sweaters. And yeah, so um this further piqus people's curiosity. Like Rubinstein inadvertently just set off this huge chain reaction that people's entire careers have been built on his one prediction of the Ultimatum game. Right, Um, so they start they

start looking into theories about sharing and altruism. And we actually did a podcast how altruism works based on an article called is there such a thing as a truly unselfish act? And altruism shouldn't exist, you know, rational maximization should be has it falls in line with evolutionary theory. But I mean, so, what is that the human spirit? Or is that something we've developed? No one has any idea. Um, and and they we don't even know if it's human. Actually, um,

they've done some studies. They did one on chimps and they show zero. Uh, they don't show any sense of fairness. They don't mind if they're if they're getting screwed out of something, as long as they get something. They don't care in what amount or how much someone else is getting. But other monkeys have shown a sense of fairness, specifically the cappuccine monkey. Yeah, this is a cool study. Did you ever see Monkey Shines? Uh? No, you didn't see

Monkey Shines? Okay, well, wow, it was pretty good. Actually it's a it's a horror movie about a out of control helper monkey who just goes on the rampage like Silent Night, Deadly Night, except with the monkey. That's exactly why I didn't see it. No, thank you, it was okay. Um, well, basically this is the same kind of monkey, and they're

very smart and they're off news for helper monkeys. Um. And these researchers just down the road apiece at Emory University ran this experiment on them, and so they would put some monkeys together and they'd have them get the retrieve a pebble, and in return for bringing the researcher a pebble, both monkeys would get cucumbers. Uh. Now, I for a while, one monkey would would get a grape in return for retrieving a pebble, while the others still

got cucumbers. So one monkey's kind of like, you know what's going on. And then after a while, while one monkey still had to retrieve a pebble to even get a cucumber, the other monkey was getting grapes for doing nothing. And this led to monkeys getting upset, yeah, throwing food, refusing to play and really, I mean, like capucine monkeys, if you've never seen when you really have to go onto h what's the ultimatum game on how stuff works? If they're the cutest things on the planet, I can't

imagine seeing one of these just acting hurt. Yeah, it's kind of a mean experien a man. It happened just down the road. But apparently it let us know that humans aren't the only ones with this higher mind sense of fairness kind of thing. Ultimately, though, we still have no idea what's going on, right. I did think it was interesting interesting that um people that participated in the in the game, they they found that they looked for nonverbal cues from their partner in the game to try

and pick up what they think they should give. And it kind of made me think, you know, any study where you know you're being studied I kind of have not problems with. But you wonder, you know, if I knew that someone was giving me this twenty dollar bill, I would give away half of it just so wouldn't mean it wouldn't seem like a schmuck, right exactly. It's like Heisenberg's uncertainty principle. You know, just by observing something

you change its behavior. Uh. And I wonder how much that factors into this too, And that that nonverbal cue study you were talking about it seemed a little hinky

to me. I wasn't sure how much faith I put in it, But I wonder how much of that lack of faith is driving just the the idea that that's just such a depressing um notion that we're really all always in fact out for ourselves and trying to rationally maximize, and we're actually doing it through non verbal cues sizing up how generous we think the other person will be for a big payoff later on. Like you and I are walking down the street and I see a twenty

on the ground. I looked as I pick it up, and then I look to see if you saw me pick it up pretty much and maybe if I notice you saw me, I'll share it with you. If you

didn't notice, then what twenty? Right? And even if even if you just kind of go across the board and help everybody equally, just as a general rule, how much of that uh is based on a belief in karma, you know, karmic deck, karmic payback, that kind of that you think that you're going to ultimately receive a rule and that's why you do it, which leads us back to you know that altruism definitely, which apparently doesn't exist, And I don't know, I figure five ten years down

the road will have the uh the specific you know, edit code for altruism or are faking of altruism down? Well, I do know if someone came and gave us twenty one dollar bills and we'd probably head down to the dance club and every everything would be fine. We'd probably we wouldn't split it evenly. We just go ahead and throw it on stage at the same time. Exactly, Okay, that's yeah, exactly. Well, this is a pretty dense topic.

It's a really interesting article. I suggest you guys go read it What's the Ultimatum Game on how Stuff Works dot Com and stick around to find out which article has chucked very nervous for next week? So, Chuck, what article has you very nervous? Well, Josh, next week, I'm going to visit the in laws in Akron, Ohio, and we have plans to go to Cedar Point Suited Point, which is the greatest amusement park on the planet. That's what I've heard. My wife has been touting it as

for years. You gotta go on the Millennium Coaster. It is the scariest experience you will ever go through. You're basically falling four forward as you go down this um, I think ninety degree or maybe more than ninety degree hill. It's it's mind bending, lee scary. I can't wait, and I love roller coasters, but it does have me a

little worried. In the article that we have on our website, what if I were on a roller coaster and the safety harness broke by our our veteran writer Katherine Hear, Yeah, I don't know that you should read that before you go. You might want to save that work for after. Good idea. Yeah, so you can find out what would happen if the safety harness broke while you're on a roller coaster on

how stuff works dot com. But again, like Chuck, I advise you to read it after you get back from the amusement park for more on this and thousands of other topics. Is it how stuff works dot com? Let us know what you did. Send an email to podcast at how stuff works dot com, brought to you by the reinvented two thousand twelve camera. It's ready, are you