I wonder what it is about the ultimatum game that makes for journalistic error
? More of the same from Emily Yoffe in Slate:
We like to think we go through life as rational beings. Much of economic theory is based on the notion that humans make rational choices (which may mean that economists don’t get out much).
“Rationality” is a model, and admits any form of behavior. It does not say how someone “should” behave.
In 1982, some economists came up with a little game to study negotiating strategies. The results showed that rationality is subservient to more powerful drives—and demonstrated why human beings so easily conclude they are being wronged. The idea of the “ultimatum game” is simple. Player A is given 20 $1 bills and told that, in order to keep any of the money, A must share it with Player B. If B accepts A’s offer, they both pocket whatever they’ve agreed to. If B rejects the offer, they both get nothing. Economists naturally expected the players to do the rational thing: A would offer the lowest possible amount—$1; and B, knowing $1 was more than zero, would accept. Ha!
This is the Nash Equilibrium of the game, if both players cared only about money. It has nothing to do with “rationality”.
In the years the game has been played, it’s been found that almost half the A’s immediately offer to split the money—an offer B’s accept. When A offers $9 or even $8, B usually says yes. But when A’s offer drops to $7, about half the B’s walk away. The lower A’s offer, the more likely the B’s are to turn their backs on a few free dollars in favor of a more satisfying outcome: punishing the person who offended their sense of fairness. This impulse is not illogical; it is essential.
Only the hypothetical economists in the article found it illogical, and they’re not real. Once more: rejection of a lowball offer in the ultimatum game is rational under the entirely realistic assumption that people care about more than money. Please stop attacking the straw economist who disagrees with that statement.
Time for round two of economics euphemism bingo! This time I was especially exasperated because the article in question (from BBC News) is about the China-Tibet issue, not about business or stocks or some place where the euphemisms hide something unimportant.
Let’s wade right on in:
“Some say that is not practical – that an independent Tibet would not be viable. It might struggle to cope economically.”
Wouldn’t have enough money? Lack of resources? Lack of infrastructure?
“A “one-country, two-systems model” is one possibility. So far, that model has gone well in Hong Kong – although Hong Kong and Tibet are at very different stages of development.”
OK, tell me about the differences, then. What’s a ‘stage of development’? Why is it important?
“When they revised their plans for Tibet in the aftermath of the late-1980s protests, China’s leaders thought a programme of rapid economic development in Tibet would stifle calls for political change.“
Economic development how? More money? More resources? More investment?
Tibetans are frustrated despite heavy economic investment.
Delete economic? What is economic investment? What is non-economic investment?
To me, it’s just lazy. Just say what you mean. The word “economics” is not a crutch or a bin into which you sweep all the stuff you don’t want to talk about. Just stop using it altogether.