Best economics text book
- Thread starter FUCK THE POLICE
- Start date
What a massive pile of stupid. Of course, the premise of this stupidity is that the PIE is FINITE and therefore, for someone to have gained, someone else must have given something up. That is a MORONIC premise in that the economy is infinite and never finite. This is why Marxism is such a failed and stupid ideology.
When will an offer in the ultimatum game be accepted?
Suppose $100 is to be split, and there is a fairness norm of 50–50. When the proposal is $50 or above, (y ≥ 50), the Responder feels positively disposed towards the Proposer and would naturally accept the proposal, as rejecting it would hurt both herself and the Proposer whom she appreciates because they conform to, or were even more generous than, the social norm. But if the offer is below $50 then she feels that the 50–50 norm is not being respected, and she may want to punish the Proposer for this breach. If she does reject the offer, this will come at a cost to her, because rejection means that both receive nothing.
Suppose the Responder’s anger at the breach of the social norm depends on the size of the breach: if the Proposer offers nothing she will be furious, but she’s more likely to be puzzled than angry at an offer of $49.50 rather than the $50 offer she might have expected based on the social norm. So how much satisfaction she would derive from punishing a Proposer’s low offer depends on two things: her private reciprocity motive (R), and the gain from accepting the offer
. R is a number that indicates the strength of the Responder’s private reciprocity motive: if R is a large number, then she cares a lot about whether the Proposer is acting generously and fairly or not, but if R = 0 she does not care about the Proposer’s motives at all. So the satisfaction at rejecting a low offer is R(50 – y). The gain from accepting the offer is the offer itself, or y.
When will an offer in the ultimatum game be accepted?
Suppose $100 is to be split, and there is a fairness norm of 50–50. When the proposal is $50 or above, (y ≥ 50), the Responder feels positively disposed towards the Proposer and would naturally accept the proposal, as rejecting it would hurt both herself and the Proposer whom she appreciates because they conform to, or were even more generous than, the social norm. But if the offer is below $50 then she feels that the 50–50 norm is not being respected, and she may want to punish the Proposer for this breach. If she does reject the offer, this will come at a cost to her, because rejection means that both receive nothing.
Suppose the Responder’s anger at the breach of the social norm depends on the size of the breach: if the Proposer offers nothing she will be furious, but she’s more likely to be puzzled than angry at an offer of $49.50 rather than the $50 offer she might have expected based on the social norm. So how much satisfaction she would derive from punishing a Proposer’s low offer depends on two things: her private reciprocity motive (R), and the gain from accepting the offer
. R is a number that indicates the strength of the Responder’s private reciprocity motive: if R is a large number, then she cares a lot about whether the Proposer is acting generously and fairly or not, but if R = 0 she does not care about the Proposer’s motives at all. So the satisfaction at rejecting a low offer is R(50 – y). The gain from accepting the offer is the offer itself, or y.