Ultimatum Game

CORE DEFINITION

The Ultimatum Game is a practical application of game theory in economics and comparative psychology. It was first turned into an experiment by Werner Güth et al. in 1982. Experiments using the Ultimatum Game are often used to study altruism or self-interest. Different experimental setups of the Ultimatum Game can be used to investigate whether humans in experiments only aim to maximize their own profit or also consider the interests of others. Consideration for others can stem from rules that benefit oneself or everyone in the game, cultural customs such as a sense of justice, and the impression one leaves on others and observers. Neurobiological experiments have also successfully used the Ultimatum Game, for example, to detect the effects and consequences of brain damage on behavior. A multiplayer variant is the Pirate Game. The Ultimatum Game is a non-zero-sum game played by two participants. In this game, a proposer offers a resource allocation scheme to a responder; if the responder agrees, the resources are allocated according to the scheme; if not, both get nothing. According to the rational man assumption, as long as the proposer offers a small amount of resources to the responder, the responder should accept, because it is better than getting nothing.