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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: rimshot who wrote (34199)8/22/2021 7:12:13 PM
From: Sun Tzu2 Recommendations

Recommended By
ajtj99
towerdog

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In the ultimatum game, logic tells you that the proposer should offer as little as he can and that the receiver should accept it. After all, they will both walk away with money and there is no reason for a person to refuse free money coming their way.

In reality, offers less than 30% were often rejected and offers of less than 25% were almost always rejected. In other words, most people will tell the proposer to go and shove it if hey perceive him to be unfair, even though that costs them money. Intuitively, we all understand this. The most common proposal was to split the money 50/50 and on average the people proposed to split it 60/40. Furthermore this number doesn't change based on how much money is offered. Receivers are as likely to reject $25 out of $100 pie as they are to reject a $2.50 offer out of the $10 pie.

In the dictator game the proposer doesn't have to give anything to the receiver. Yet only 20% of the people pocket all the money themselves.

The book provides insights into conditions under which people will behave ethically and justifications they use for bending the rules.

It also provides a number of real world strategies that are in use to signal credibility and/or coerce the desired outcome.

One interesting tidbit I got was why women wear engagement rings and when that tradition started. About a 100 years ago, premarital sex was common but a woman's reputation would take a hard hit if the man wouldn't marry her. For a while the courts took to hearing cases where the woman complained of deception for the man breaking his promise to marry her. But eventually that went away. Getting an expensive engagement ring which she'd get to keep was a strategy to prove that he was sincere in his desire to mary to her. She would then be more comfortable taking a chance with him because it would have been less likely for him to just say that he wants to marry her just so he can get in bed with her.
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