The Ultimatum Game’s Implications for Liberty
The outcomes of game theory’s ULTIMATUM GAME raise serious implications for the prospects of freedom in any community.
In one version, given two players A and B, A finds $100 that he can keep only on the condition that he gives a portion to player B that B will accept. B also knows the conditions, but if B declines the 1-time offer, neither player gets anything.
Experiments show that B usually turns down anything less than a quarter of the money. In essence, people are willing to have nothing rather than something if they think what’s being offered is “unfair” even for found money – property that they’ve had no hand in creating or perpetuating. The purely rational choice would be to accept any amount since something is always better than nothing, but many people’s sense of “fairness” and “justice” tilts their preference to desiring nothing for all parties concerned.
This occurred to me while debating “price gouging” with an Atlanta resident who made it clear he’d rather sit in a city with no gasoline than in one in which the price impacted the marginal dollars of poor people in a much more significant way than for the well off (as if it could be any other way).
Such a mindset — hopefully, not genetic in origin — explains the movie monster type resilience of socialism which is ever popular no matter how much misery it spreads equally. The game implies the resentment is inevitable in a necessarily free and unequal society, and the task of people who want freedom to be the rule is a relentless task of educating people to know that freedom is in their best interest.