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Notes For Tutorial 5
Notes For Tutorial 5
Notes For Tutorial 5
-House money effect where people are more willing to take chances
if they think they are ahead of the game.
Tutorial 4
2)In Ultimatum, both players have a choice on what they want to do.
The person with the money can choose how much he would like to
keep for himself and how much to give the other party but the other
party also gets to choose whether to accept the offer. However if he
does not accept the offer,both parties would not get anything. But
rationally,even a dollar would be considered a gain and any rational
person would take up the offer regardless of how small it is but some
people are willing to to reject the offer to show their digust at how
low the offer is. In Dictator,the other party has totally no say in the
game,where neither generosity would be rewarded or would
selfishness be punished.
Altrusim is rewarded and selfishness is punished in ultimatum but
not Dictator.
Dictator one party has more control,people still give bcos of scrutiny
4)People would tend to react the way people watching the game
shows would expect them to react. Scrutiny,selection bias and
context. Game shows are on TV so people are acting in a way where
people would want themselves to be viewed. If people are just
playing for peanuts,they would just play nice.