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Ultimatum Game

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Last updated: 2026-07-18

The Ultimatum Game

It is a classic experiment of game theory, one of the most famous experiments in behavioral economics.

How it works:

  • There are two players: Proposer and Responder.
  • They are given a sum of money (say $100).
  • The Proposer offers a division (e.g.: 50-50, 70-30, 90-10, etc.).
  • The Responder can accept (both take what was offered) or reject (both keep $0).

According to traditional neoclassical economic theory (pure rational economic man), the Proposer should offer the minimum possible amount (e.g.: $1) and the Responder should accept it, because “something is better than nothing.”

What real results show (replicated in hundreds of cultures):

  • Most proposers offer divisions close to 50-50 or between 40-60%.
  • Responders frequently reject offers below 20-30%, even though that costs them money.
  • This indicates that people value fairness and have an aversion to injustice. They prefer to punish the one who is “greedy” even if it hurts them.

Biological and evolutionary relevance:

It shows that we have emotional mechanisms (anger, resentment, sense of justice) that punish excessive egoism. This helps maintain reciprocity and long-term cooperation. It is a form of “punitive altruism”: paying a personal cost to sanction those who violate social norms.

Last updated: 2026-07-18

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