How Do Players Split an Amount of Money in the Ultimatum Game?

Werner Güth

The ultimatum game is one of the most famous experiments in economics. It involves two players, one of them receives a sum of money which he has to share with a second player. The first player, the “proposer”, can decide how much he offers the second player, called “responder”, who can either accept or reject the offer. If the responder rejects, neither of the players receives any money. Mathematically, the first intuition is to offer the opponent the smallest amount possible. However, during the game players routinely reject even high offers if they deem the split unfair. In this video, WERNER GÜTH explains how he came to develop the ultimatum game and how modifications of the game produce different outcomes.

DOI:

https://doi.org/10.21036/LTPUB10159

Researcher

Werner Güth is the Director of the Strategic Interaction Group at the Max Planck Institute of Economics, in Jena. Previously, Güth was professor at the Humboldt-University, Berlin. His specific take on economics, particularly game theory, experimental economics and microeconomics, is shaped by a strong interest in the social sciences, such as psychology and philosophy. In the field of game theory, Güth traces back one of the most famous economic experiments, following the psychological decision making processes of two game players. His research is set to account for different outcomes of the game, when it is modified.

Max Planck Institute for Research on Collective Goods

Initially founded as a Max Planck institute that investigates the provision of collective goods, the institute has developed into an international hub that focuses in its research mainly on applied economics and on behavioral law. Moreover, the institute hosts three independent research groups on “moral courage”, “economic cognition”, and “mechanisms of normative change”. The set of researchers from various disciplines, such as economics, law, psychology, and sociology, constitutes a truly interdisciplinary environment that facilitates a cross-fertilization of ideas.