Wisely Playing the Ultimatum Game

by Armen · 6 comments

Social IntelligenceIn the book “Social Intelligence”, Daniel Goleman brings up the concept of an “Ultimatum Game, where one partner makes proposals that the other can only accept or reject.”  The example given is one that describes that you and a stranger are able to split 10 dollars between yourselves.  The stranger offers to give you 2 of the 10 dollars.

Even though that would provide you with a net profit of 2 dollars, most people placed in this scenario will turn down the offer, as they see that the stranger is getting the other 8 dollars, and so their feeling of being shortchanged will cause an illogical response.  It is described as being similar to the response one provides when they are in a state of road rage, as the brain fires up irrationally to lead the victim to want to pass cars that are close by, or drive in an otherwise aggressive fashion.

When occurrences like this come up, the key idea is to separate yourself from the situation.  When you see that there is benefit coming to you and another person at the same time, it saves you time and energy to take that which naturally comes your way.  Battling to get more of a free item makes you look greedy, and it can result in getting nothing at all.

Recognizing that you are in a predicament where you are acting irrationally is the first step to correcting the problem.  Your conscience will probably let you know that you should not be acting as you are.  The next step is to free yourself from thoughts about the gains of the other person.  As there are numerous people in the world, it doesn’t benefit you to think about the progresses made by others in a competitive way.

{ 6 comments… read them below or add one }

Mike King December 24, 2008 at 2:17 pm

Interesting points Armen. Thanks for the ideas and thoughts in this one. I haven’t read that book yet either.

Anyway, have a Merry Christmas!

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Alberto December 25, 2008 at 7:31 pm

Wow, I’ve never thought of it that way. Why bog yourself down with what others receive when you should be enjoying that which YOU receive. Excellent post!

Happy holidays!

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Armen December 27, 2008 at 2:36 am

Mike: Thanks for that, and it is quite enjoyable to read through. It talks about aspects of social understanding that I was looking to see. Thanks for that holiday goodness that you have sent over. I know your time will go positively.

Alberto: I am with you on that one. It can be tough to do, but it is worth remembering at times, so that thoughts which aren’t helpful fade away. Thanks, and enjoy these following holiday days also.

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iwalk December 31, 2008 at 11:06 pm

According to chinese tradition, 2009 is OX(牛)year, OX means growing, Yeah, A growing year!

So Happy 牛 Year to you!

☆╭┐┌╮☆°.﹒
╭┘└┘└╮∴°☆°
└┐..┌┘───╮∴°
╭┴──┤Happy ├╮
│o o│牛year │●°
╰┬──╯    │ ∴°﹒
☆ | / /∴☆

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Andrea Hill January 4, 2009 at 10:29 pm

First off, thanks for stopping by my blog!

Secondly: I’ve heard the story before about splitting the money.. I can’t recall in what book (I don’t believe I’ve read social intelligence..). In the study I heard about, the two people would either each get money, or neither would. Given that ultimatum, the offerer was much more likely to give a ‘fair deal’. It is interesting how our reactions are impacted by circumstance.

I actually just finished reading “the Paradox of Choice” on how an overabundance of choices results in our overall dissatisfaction. The premise is similar to what you mention: we sense loss more fully.

Thanks for an intersting post!
Andrea

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Armen January 4, 2009 at 11:19 pm

iwalk: Thanks for the positive messages and image. The animal provides a cheery look. I hope your year comes with growth as well.

Andrea: I am glad to have run across your site. The topics you discuss, your writing style, and the illustrations and relevant partial-screenshot images I have noticed set it apart from numerous sites.

I think it is great that you came across similar material about the ultimatum concept, as it is always refreshing to hear about someone else having gone through the same understanding. It is always interesting to see how far from the optimal path individuals will deviate due to circumstances that affect judgment.

I will read through The Paradox of Choice the next time I am at the bookstore. I support that idea completely, as methodically limiting ones choices, options, and modes of outlet has been seen to result in large, and focused, efforts leading to gains. I appreciate the input you have provided.

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