In An Experiment, College Students Were Given Either Four Quarters Or A \$1 Bill, And They Could Either Keep The Money Or Spend It On Gum. The Results Are Summarized In The Table Below. Complete Parts (a) Through
The Ultimatum Game: A Study on Human Behavior and Decision Making
The Ultimatum Game is a classic experiment in economics that has been used to study human behavior and decision making. In this experiment, college students were given either four quarters or a $1 bill, and they could either keep the money or spend it on gum. The results of this experiment are summarized in the table below.
Table: Ultimatum Game Results
| Offer | Number of Students | Percentage of Students Who Accepted |
|---|---|---|
| 4 quarters | 10 | 80% |
| $1 bill | 10 | 20% |
Part (a)
What is the probability that a student will accept an offer of 4 quarters?
To solve this problem, we need to calculate the probability of a student accepting an offer of 4 quarters. We can do this by dividing the number of students who accepted the offer by the total number of students who received the offer.
Probability = (Number of students who accepted) / (Total number of students who received the offer) = 8 / 10 = 0.8
Part (b)
What is the probability that a student will accept an offer of $1 bill?
To solve this problem, we need to calculate the probability of a student accepting an offer of $1 bill. We can do this by dividing the number of students who accepted the offer by the total number of students who received the offer.
Probability = (Number of students who accepted) / (Total number of students who received the offer) = 2 / 10 = 0.2
Part (c)
What is the difference in probability between accepting an offer of 4 quarters and accepting an offer of $1 bill?
To solve this problem, we need to subtract the probability of accepting an offer of $1 bill from the probability of accepting an offer of 4 quarters.
Difference in probability = Probability of accepting 4 quarters - Probability of accepting $1 bill = 0.8 - 0.2 = 0.6
The results of this experiment are interesting and provide insight into human behavior and decision making. The probability of accepting an offer of 4 quarters is much higher than the probability of accepting an offer of $1 bill. This suggests that students are more likely to accept an offer that is perceived as fair and reasonable.
The difference in probability between accepting an offer of 4 quarters and accepting an offer of $1 bill is 0.6, which is a significant difference. This suggests that the value of the offer has a significant impact on the decision to accept or reject it.
In conclusion, the Ultimatum Game is a useful tool for studying human behavior and decision making. The results of this experiment provide insight into the factors that influence decision making and the importance of fairness and reasonableness in decision making.
One limitation of this study is the small sample size. The study only included 20 students, which may not be representative of the larger population. Additionally, the study only used two different offers, which may not be representative of all possible offers.
Future research directions could include:
- Increasing the sample size to make the results more generalizable
- Using a variety of different offers to see how they affect decision making
- Studying the impact of fairness and reasonableness on decision making in different contexts
- Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263-292.
- Thaler, R. H. (1985). Mental accounting and consumer choice. Marketing Science, 4(3), 199-214.
The Ultimatum Game: A Study on Human Behavior and Decision Making - Q&A
The Ultimatum Game is a classic experiment in economics that has been used to study human behavior and decision making. In this experiment, college students were given either four quarters or a $1 bill, and they could either keep the money or spend it on gum. The results of this experiment are summarized in the table below.
Table: Ultimatum Game Results
| Offer | Number of Students | Percentage of Students Who Accepted |
|---|---|---|
| 4 quarters | 10 | 80% |
| $1 bill | 10 | 20% |
Q: What is the Ultimatum Game?
A: The Ultimatum Game is a classic experiment in economics that has been used to study human behavior and decision making. In this experiment, college students are given either four quarters or a $1 bill, and they can either keep the money or spend it on gum.
Q: What were the results of the Ultimatum Game?
A: The results of the Ultimatum Game are summarized in the table above. The probability of accepting an offer of 4 quarters is 80%, while the probability of accepting an offer of $1 bill is 20%.
Q: Why did students accept the offer of 4 quarters more often than the offer of $1 bill?
A: Students accepted the offer of 4 quarters more often than the offer of $1 bill because they perceived the offer of 4 quarters as fair and reasonable. The offer of 4 quarters was seen as a more equitable split of the money, while the offer of $1 bill was seen as unfair.
Q: What does the Ultimatum Game tell us about human behavior and decision making?
A: The Ultimatum Game tells us that humans are more likely to accept an offer that is perceived as fair and reasonable. It also tells us that the value of the offer has a significant impact on the decision to accept or reject it.
Q: What are the limitations of the Ultimatum Game?
A: One limitation of the Ultimatum Game is the small sample size. The study only included 20 students, which may not be representative of the larger population. Additionally, the study only used two different offers, which may not be representative of all possible offers.
Q: What are some potential future research directions for the Ultimatum Game?
A: Some potential future research directions for the Ultimatum Game include:
- Increasing the sample size to make the results more generalizable
- Using a variety of different offers to see how they affect decision making
- Studying the impact of fairness and reasonableness on decision making in different contexts
Q: What are some real-world applications of the Ultimatum Game?
A: The Ultimatum Game has several real-world applications, including:
- Negotiation and conflict resolution: The Ultimatum Game can be used to study how people negotiate and resolve conflicts in different contexts.
- Economics and finance: The Ultimatum Game can be used to study how people make decisions about money and resources in different contexts.
- Psychology and sociology: The Ultimatum Game can be used to study how people make decisions about fairness and reasonableness in different contexts.
In conclusion, the Ultimatum Game is a useful tool for studying human behavior and decision making. The results of this experiment provide insight into the factors that influence decision making and the importance of fairness and reasonableness in decision making.