![]() This division is presented to the second person, termed the responder, as a ‘take it or leave it’ offer (hence the name ‘ultimatum’). One person, called the proposer, divides a fixed amount of money into two parts. The ultimatum game is a simple strategic situation between two people. The following short summary from the Encyclopedia of Cognitive Science provides a context for the simulation. ![]() A staple of experimental research, ultimatum games have produced a large body of data and analysis, spanning more than two decades. In addition to broadening students’ understanding of self-interest, the Ultimatum Game simulation introduces them to the emerging sub-discipline of experimental economics. Finally, debriefing questions guide students in exploring the implications of the ultimatum game research for the widely-held belief that capitalism promotes uncaring, unethical, selfish behavior. interactions and expect others to do the same” (Henrich, Economic Man 3), and prompts thought-provoking discussion. individuals seek to maximize their own material gains in. The lesson incorporates recent research into what is sometimes called the “selfishness axiom” – that “. The simulation experience sets the stage for discussing whether capitalism can be “good” for the poor in an ethical and moral sense, as well as in terms of material well-being. This classroom activity simulates the Ultimatum Game, a simple 2-person experimental interaction used widely by researchers investigating the nature of self-interest. Answering the question of whether capitalism is good for the poor, then, requires that we consider self-interest. The discipline of economics and the model of Homo economicus, or economic man, is built on the fundamental assumption of self-interest. Jesus’s unsettling query, “Does it profit a man to gain the world if he loses his soul?” is universal – the question is asked in some form by all major religions of the world – and echoes in even the most secular manifestations of civil society. In asserting that capitalism is good for the poor, even its most ardent supporters must confront the question of whether capitalism promotes material well-being at the cost of moral depravity. ![]() I see the game as simply providing counter evidence to the general presumption that participation in a market economy (capitalism) makes a person more selfish. Acting as consumers, producers, workers, savers, investors, and citizens, people respond to incentives in order to allocate their scarce resources in ways that provide the highest possible returns to them.Responses to incentives are predictable because people usually pursue their self-interest.Standard 4: People respond predictably to positive and negative incentives. Note that the lesson, in and of itself, is not sufficient to guarantee student proficiency in the identified standards. This activity addresses parts of the following content standards in economics. Virtual Lesson Variation (a MobLab Activity): Instructions and Slides Activity Demonstration Video doc fileincluding procedures, handouts, visuals, teacher guide, and Appendix.
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