Hypothetical Ultimatum Game Behavior of Pirates
Based on the contemporary observation that pirates were 'strictly just among themselves,' it is hypothesized that if they were to act as Responders in an ultimatum game, they would reject any proposed split that offered them less than half of the total amount. This suggests an extremely strong preference for fairness and a willingness to punish unfairness.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
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Hypothetical Ultimatum Game Behavior of Pirates
Justice on the High Seas
The Pirate's Paradox: Reconciling Lawlessness and Internal Justice
A 17th-century merchant, whose ship was plundered, wrote in his journal: "The pirates were villains of the highest order, a scandal to all civilized men. Yet, I was astonished to see them meticulously divide their spoils, ensuring each man received his promised share according to their own articles, punishing a man who tried to hide a single gold coin for himself." Which of the following statements best reconciles these seemingly contradictory observations?
The Pirate's Duality
Despite being viewed as lawless criminals by outsiders, many pirate crews operated with a strong internal code of conduct. Match each observed pirate practice with the principle of governance or justice it best exemplifies.
Based on contemporary accounts, the characterization of pirate crews as being 'strictly just among themselves' indicates that their internal rules and sense of fairness were fundamentally the same as the legal systems of the nations whose ships they attacked.
The Function of Pirate Justice
Evaluating the Pirate Social Contract
Contemporary accounts describe pirate crews as being both 'abandoned to all Vice' in their dealings with outsiders, yet 'strictly just among themselves' when dividing spoils or enforcing their own rules. What is the most likely functional reason for this internal system of justice?
Two pirates on a ship known for its strict internal code of conduct capture a chest containing 10 gold coins. The ship's captain grants one pirate, 'Proposer Pete,' the power to decide how the 10 coins will be split between himself and the other pirate, 'Responder Roger.' Roger's only choice is to either accept the proposed split, in which case they both receive their share, or reject it, in which case both pirates get nothing. Based on contemporary observations about pirate crews' internal sense of justice, what is the most probable course of action and outcome?
Learn After
In a one-time interaction, a Proposer is given $100 and must offer a portion of it to a Responder. The Responder can either accept the offer, in which case they both keep their shares, or reject it, in which case both receive nothing. The Responder is part of a social group known for valuing fairness and equality among its members above all else, and they are willing to enforce these norms even at a personal cost. If the Proposer offers the Responder just $10, what is the Responder's most likely action and why?
The Seafarer's Share
Rationality vs. Fairness in Decision-Making
In a one-shot interaction where a sum of money is to be split, an individual who rejects an offer of 20% of the total sum is acting irrationally, because receiving 20% is always financially preferable to receiving nothing.
Comparing Decision-Making Models
In a one-shot ultimatum game, a Proposer is given $100 and must offer a portion to a Responder. If the Responder rejects the offer, both players receive nothing. Match each Responder profile below to the minimum offer they would most likely accept.
You are a Proposer in a one-time interaction where you must split $100 with a Responder. If the Responder accepts your offer, you both get the agreed-upon shares. If they reject it, you both get nothing. You know from reliable sources that the Responder belongs to a community that values equal outcomes so strongly that they will reject any offer they perceive as unfair, even if it means they receive no money. To maximize your own financial gain, what offer should you make to the Responder?
The Responder's Dilemma
The Captain's Offer
In a one-time, anonymous interaction, one person (the 'Proposer') is given $1,000 and must offer a portion of it to a second person (the 'Responder'). If the Responder accepts the offer, the money is split as proposed. If the Responder rejects the offer, both people receive nothing. The Proposer offers $10, and the Responder rejects it. An observer concludes, 'The Responder's decision was irrational because receiving $10 is always better than receiving $0.' Which of the following statements provides the best critique of the observer's conclusion?
In a one-shot interaction where a sum of money is to be split, an individual who rejects an offer of 20% of the total sum is acting irrationally, because receiving 20% is always financially preferable to receiving nothing.