Skip to content

Irrational Markets: People reject free money out of anger

Submitted June 06, 2009 by sweeneytodd

Game theory has provided researchers in a variety of fields, from psychology to economics, an opportunity to test human behaviors under controlled conditions. It allows big questions—are humans rational actors when money's on the line, for example—to be tested in situations where behaviors that deviate from expectations are easy to detect. The Ultimatum Game is one example of these experiments, and it has been used to show that humans aren't purely rational when it comes to monetary decisions, as they appear willing to make financial sacrifices in order to punish others in the name of fairness. A paper that will appear at PNAS this week takes things a step further and shows that people will still reject unfair monetary offers, even when the only one they punish is themselves.

Score: 6

2 comments

Comments RSS Feed

Start a new discussion.

How Much Money?

Score: 0
Created by jsuggs June 06, 2009

I think that the results of the study would vary depending on how much money was actually at stake.  If the original stack was $10, then some people might reject any money just to screw with the results because "its only a few bucks."  Raise that value to $100, and with people getting only $20 they might take the offer where they would have definitely rejected $2.  $1000 would change the game.  But think if the original amount was $1,000,000.  Even if someone only offered them $200,000 would they really reject that much money just because it wasn't fair?

Spite = Priceless

Score: 0
Created by jsuggs June 06, 2009

I think that the moral of the story (ok, article) is that you can't put a pricetag on spite.