The ultimatum game is one of the most famous experiments in economics. It involves two players, one of them receives a sum of money which he has to share with a second player. The first player, the “proposer”, can decide how much he offers the second player, called “responder”, who can either accept or reject the offer. If the responder rejects, neither of the players receives any money. Mathematically, the first intuition is to offer the opponent the smallest amount possible. However, during the game players routinely reject even high offers if they deem the split unfair. In this video, WERNER GÜTH explains how he came to develop the ultimatum game and how modifications of the game produce different outcomes.
Initially founded as a Max Planck institute that investigates the provision of collective goods, the institute has developed into an international hub that focuses in its research mainly on applied economics and on behavioral law. Moreover, the institute hosts three independent research groups on “moral courage”, “economic cognition”, and “mechanisms of normative change”. The set of researchers from various disciplines, such as economics, law, psychology, and sociology, constitutes a truly interdisciplinary environment that facilitates a cross-fertilization of ideas.
An Experimental Analysis of Ultimatum Bargaining
Journal of Economic Behavior and Organization
Published in 1982
How Werner Güth's Ultimatum Game Shaped Our Understanding of Social Behavior
Journal of Economic Behavior & Organization
Published in 2014
Evolutionarily Stable Co-Operative Commitments
Theory and Decision
Published in 2000