This may very well be correct, but you have to keep in mind that every time your opponent declines the offer you lose your entire payout. Every time he accepts a 65/35 deal you gain, but you only gain 15% compared to the 50/50 deal (which is pretty much guaranteed to be accepted). So the 65/35 proposal needs a fairly significant majority to show a profit.
And, just to be clear, this is what makes 50/50 magical. It’s the highest amount you can get that is absolutely guaranteed to not instill any ill will in the other participant. Once you start to creep over that amount you need to either get a very strong lion’s share (90/10-ish), or you need to be REALLY sure that there’s no way in hell it’s ever going to tick him off. Offering something like 60/40 is pretty much suicide.
I was just discussing this with my mom; we came to the conclusion that if you just think about what you’re getting, the obvious answer is $1 and up, because $1 is more than you came in with. If you think about what *the other person * is getting, then you’re likely to feel cheated by anything less than a 50/50 split.
ETA: I thought about starting this today - you saved me the trouble, Walton. 
I don’t like your choices. I wouldn’t accept $1 but I’d accept $20. I really am not that principled. I’d rather have $20 in my pocket than $0. “Teaching someone a lesson” just isn’t worth that much to me, but I’d be able to turn down 5 or 10 bucks out of spite.
But in the long run, all these irrational acts may collectively be rational. It sets some ground rules regarding what treatment you will accept. Sure, rejecting $1 or $499 hurts you now, but people who know you are going to stop offering you less than $500. I think a lot of “irrational” behavior is like this - irrational as a once off but rational over the long term - revenge can be a useful tool, as well as punishments that cost money to administer.
Even if the players of the game are anonymous, and it’s a one-time deal which you know will never happen again? My behavior would change drastically if either of these conditions were false, but as the game is played you aren’t proving anything by refusing an offer.
Indeed, that’s how economists think you are supposed to look at it.
But they’re wrong. See, if the other guy KNOWS that the average person will hold out for a reasonable amount, he will offer more, thus in the long run, it’s a WIN for people to hold out. Besides, my time is worth more than a dollar.
Really the issue is whether you treat the game like a contiguous part of real life, or in isolation as simply a game with no ongoing consequences on either side.
Those refusing $400 seem to claim the visceral thrill of denying an alleged asshole $600 exceeds the value of $400; then justify by saying $400 isn’t much money. But then $600 isn’t much either so the other guy won’t much care you said No. (Of course if $600 is a lot for him, but $400 is little for you, he needs the money more than you: maybe you should then accept the $400 and give some back to him!)
If depriving alleged assholes of $600 really has $400 entertainment value to you perhaps you’ve got a new life-style choice. Spend your days pretending to buy cars! Many of the salesmen are assholes and a commission might be in the $600 range. Negotiate with them awhile, then suddenly walk out! There! Wasn’t that more fun than going to a concert?
(My own threshold is somewhere between $2 and $199 but that wasn’t a poll option. :smack: )
If human beings were rational, player B would be offered (and would accept) 1 dollar every time. Player B would never get an offer higher than 1 dollar if both players were purely rational and ignored irrational concepts of fairness.
Because people are not rational, the real results would end up being that much more fair offers would be given, and both players would be likely to offer and accept close to 50% of the money. This experiment is a great example of how reason is not necessarily a perfect tool for analyzing a situation, and how irrational behavior can end up being beneficial.
Right, and the question becomes how much not feeling cheated is worth to you. Most people in this poll seem to not think it is worth losing out on $200+, and half of those don’t think it’s even worth losing out on $1.
Seeing as I’m hard up for money, I think I’d probably say it’s not worth losing out on, say, $25.
However, if you know that this game has been discussed in message boards and classrooms all over the world, and that there is a reasonable chance that the recipient would refuse anything less than a 50/50 split (because a large percentage of people have responded as such in polls like this one) then you as the offerer are incentivised to take that into account.
Which means that while I would personally take the dollar, I should not admit that in public and skew the gestalt slightly.
This is exactly what I think. Even a buck is free money so why am I going to complain?
I don’t like the low-end choices, either. I’d say my threshold would be around $25. I’m not much for revenge or teaching people lessons, though.
If I buy a huge delicious poundcake then give my buddy a tiny infinitesimal crumb of it, I shouldn’t be surprised when he slaps the cake out of my hands and into a mud puddle.
I’d reject anything under $300 or so. I’m a strong believer in removing the rewards for being an asshole and try to avoid conditioning people to like one.
But even if player A were completely rational and knew that player B was likely not rational, it would behoove player A to offer more than $1. You don’t need to abandon reason once you know that your fellow humans do.
How people respond to a message board poll does not translate into behavior in the real world. Especially on this message board, as I speculated on in the mirror thread to this one. There are enough people who do well for themselves on the SDMB that when they say ~$500 isn’t much money they mean it. For the vast majority of people this isn’t the case. And even taking all of this into account, only 21% responded they wouldn’t accept less than $500. That’s not such a large percentage at all.
I’ll take pretty much anything. But if it’s less than ten bucks, I reserve the right to find the guy and huck a water balloon at him for being a twerp.
First, there’s no “holding out”. You either choose to take the offer or you choose to reject it. The experiment is over at that point.
Second, your time is already spent in this scenario, so refusing the offer makes no sense from that standpoint.
I would take $1 if that was the offer. That’s $1 more than I had before the experiment. You don’t get rich by refusing to accept money.