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Rationality and the Ultimatum Game
by Matt Durand

In explaining her thesis, Yoffe refers to some ideas in economics and the way she presents them betrays a poor depth of understanding of the field. First of all, Yoffe states that economists' assumption that people are 'rational' shows that they "don't get out much". This is not a new objection; it is frequently used to suggest that economists are ensconced in some ivory tower, their theories unchecked by the more wholesome wisdom of those, like Yoffe, with a deeper understanding of the human condition. The first problem with this is that the way economists use the word 'rational' is specific to the discipline (one shouldn't scoff at this, since all fields make use of jargon and have their particularities). Rationality is defined in a functional way, specific to the models which are attempting to describe behavior. Furthermore, economists do not assume that people always behave rationally in the world, but rather in their models. Making models of behavior will always involve some simplifying assumptions, and when those assumptions change, so do the results of the model. The idea that economists are beholden to some idea that humans are always 'rational' is simply a canard; the fault lies with those, like Yoffe, with a bare grasp of the literature.

This is illustrated in the example Yoffe uses to demonstrate this 'failure' of rationality. It is a well known fact in game theory that the expected outcome of the ultimatum game (and other games for that matter) is different for the repeated version of the game. When the player who chooses the initial offer knows that a low offer can be punished in subsequent rounds of the game, the result changes to the more equitable division which Yoffe points to from the experimental results. This doesn't involve any alteration in the functional assumption of rationality built into the game. Does this mean that Yoffe will retract her faulty conclusion? Probably not. For it seems that her discussion of economics and of evolution is simply pulling at whatever convenient threads seem to support her thesis by flimsy association. Does this mean that people are always rational? Certainly not in the sense that Yoffe means, but then if that's not what the 'economist' claims, then her criticism misses the mark.

Re: Rationality and the Ultimatum Game
by JIM ACKERMAN

Most economic models assume rational behavior for 'economic' activity. Its underlying causes are left unexamined and therefore poorly identified. Let us say you want to maximize your gain in some endeavor, so you do thus and such to accomplish it, rationally. The 'want' that is the motivation for the whole deal is left untouched in the economic calculation.

It does not offend the sensibilities,however, to say that all people do not want the same thing. Some are content to muddle along. The 'rational' man of the economists in an assumption. It may be insufficient, but this does not mean that in its place stands an 'irrational' man. Economics is among other things a social endeavor, and society has a way of mitigating irrational impulses.

Morality, a referendum on right and wrong, is one of the means of doing it. Reducing morality to a neural impulse hard-wired into the brain by evolution makes it simply another coping skill and ruins its meaning. By definition, morality is the adjustment of behavior according to standards of right and wrong. It is a specifically human trait, and the capacity to learn it certainly may have been selected into the gene pool. But it is not a given, as anybody who knows anything about history understands.

Re: Rationality and the Ultimatum Game
by Mangar
Give Emily some credit. If economists generate "models" of human behavior based on the idea that humans will act rationally, then it's splitting hairs to say that their model of human nature is basically rational. That is, unless the economist is explicitly trying to model something that is, for some reason, deliberately at odds with "in the world".

Economists DO tend (not every single one, but I do see a tendency) to lack curiosity about the cognitive machinery that makes the decisions which drive economic events. That is, the cognitive component is surely defined by some sort of functionality...but according to what parameters does it function? Maximizing utility (does that mean money or happiness)? Risk aversion? Reproductive success? Or is the functionality not even designed in such a way that it maximizes anything in particular under novel conditions? Here's an idea that is foreign to most economists, but that I think quite accurately describes human adaptations (cognitive, economic, or otherwise)...humans are designed to make the decisions that have an evolutionary history of leading to a higher probability of greater reproductive success.

That is why humans act at odds with any account of utility maximization as defined by the rules of even ONE-SHOT, anonymous ultimatum (or even dictator!) games.
Re: Rationality and the Ultimatum Game
by JIM ACKERMAN

Und so, you're saying that sex is the meta-issue, the sticking point--pun intended--on which the human engine turns.

Rational or not, economics is an epicenter, if I understand you correctly.

It is designed to help people fuck.

Re: Rationality and the Ultimatum Game
by Mangar
:) Um...well, not exactly...

I'm not exactly sure what you mean by "epicenter", here.

Fucking, however, needs no further explanation! Sex is by no means "what it's all about", either, except as an intermediary activity the results in reproduction. The thing that many people don't take into account is that human cognition is not driven by any overarching, mindful goal (even subconsciously mindful, if that has any meaning). So, there's no reason to think that people designed economics thinking to themselves "Hey, if I do it this way, I'll get laid!" No. But they DO use the cognitive mechanisms which were shaped by a history of getting laid or not (again, inasmuch as fucking=reproductive success.)

Let's get off the topic of economics for a sec so I can maybe make the point succinctly. Let's say that eating ripe (as opposed to spoiled or unripe) fruit allows you to be a better nourished individual, which leads you to get laid more often (either by virtue of being alive, or looking better than your undernourished rivals). Now, the cognitive instruction that would come out of this scenario would NOT necessarily be "Eat ripe fruit so that you can get laid!" It would be the much simpler "Eat ripe fruit"...which has its form BECAUSE it has a history of getting you laid. See the difference?

Or, were you perfectly aware of the difference all along and just pokin' fun?
Just kidding.
by JIM ACKERMAN

It may take me a while but I always return my calls.

According to what you seemed to say, economics is an epicenter to the main function of the human organism, which is reproductive success. The tectonic plate runs deep but the quaking also shows on the surface. Mebbe so.

Obviously economic failure must be a disfunction for reproductive success. If you're scrawny, weak, and ill-dressed, your chances of getting laid diminish exponentially.

The huge change historically was when men discovered monogamy. Until that time, in most cultures women were chattels, traded as commodities, and if you didn't have any money, properties, or other tradable goods, you were SOL. The more you had, the more you got. The vast unwashed population of the underperforming never got laid unless they could sneak in a quick rape here or there.

In the West women think monogamy was invented of them, by them, and for them. It was the lower two-thirds of male society that reaped the benefits, pun intended.

In answer to your last question, yes.

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