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Ultimatum game

Involves 2 participants bargaining over an amount of money, where the proposer has to offer some proportion of the money


1. Either the responder accepts the offer, where the proposer keeps whatever is left

2. Or the responder declines the offer, then neither party gets to keep any money


--> segmential game 


According to the game theory, how will participants of the ultimatum game behave ?

That both participants will act in a way that will maximizes their self interest

--> responder should accept any offer, because however small he/she will go away with more than he/she had before


Tit for tat

Begins by cooperating and then every subsequent action copies the action of the other player

--> punishes defection + rewards cooperation


What stops/ prevents cooperation ?

Knowing the other party's perspective + thinking slightly harder about the task at hand


How does Fear play a role in the Ultimatum game ?

Fear explains the generosity of most proposers in the ultimatum game

--> generosity occurs due to fear of rejection by the responder, as then the proposer looses too


Dictator game

"The dictator", determines how to split an endowment (such as a cash prize) between himself and the second player

--> the recipient has no influence over the outcome


How does Greed play a role in the Dictator game ?

People act out of greed when the fear of possible losses is removed 

--> proposers offer less when there is no possibility of rejection, but still more than they would if they were acting out of self interest


Social value orientation


Refers to a person's preference about how to allocate resources (e.g. money) between the self and another person

--> e.g.: Prosocial people, individualists, competitors


Prosocial people


Wish to maximize joint gain + equality in outcomes


Individualists (SVO)

Only interested in maximizing their own gains


Competitors (SVO)

Wish to maximize relative gain

--> the difference between one's own + the others outcome


What are the 4 factors that are associated with higher levels of cooperation ?

1. Pay-off to cooperation

2. Market integration

3. Increased trust

4. Communication


What is "Noise" ?

Why is it considered to be a drawback to the TFT strategy?

1. Noise refers to an erroneous/wrong response

2. Noise may cause two interacting TFT players to enter into a cycle of never ending retaliation


ex.: racial stereotypes, reputations, biases,

--> assumptions on how the other party will behave


How can Noise be avoided ?

1. Adding an element of generosity or forgiveness (TFT+1)

--> when the other defects, still cooperating


2. Simple communication


Why does communication increase cooperation ?

1. It promotes group solidarity (trust)

2. Allows group members to express their commitment to mutually cooperate


--> BUT: misleading communication (noise) can decrease cooperation


Moralistic punishment

Occurs when non-cooperators are excluded from cooperative interactions or ostracized completely

--> fosters group cooperation


Antisocial punishment

Occurs when the punisher reduces the resources of a person whose cooperation usually benefits the group + punisher


--> the punisher therefore pays a cost

--> result of wanting to take revenge 




Do-gooder derogation

Occurs when people who help others get criticized or ridiculed fo their efforts


What are possible explanations for why people engage in antisocial punishment ?

1. Norm violators are punished for deviate from groups norms whether that means cooperating too much or too little

2. Attempt to stop high cooperators from looking too good, by forcing them to cooperate less

--> Barclays theory


Biological market theory 


When there is competition to be chosen as a social partner, low cooperators will use antisocial punishment/do-gooder derogation to reduce others cooperation + make themselves look good by comparison


Which strategies do people use to compete ?

1. Outbidding competitors

2. Making competitors look bad

3. Prevent competitors from cooperating in order to look better in comparison

--> Barclays theory


Nash equilibrium 

Refers to a situation where no one has a unilateral incentive to change strategy, meaning wanting to behave just like others do 

--> involves common knowledge of rationality 


e.x.: driving on the right side of the road - no one will change this strategy 


Unilateral deviation 

Occurs when I am the only one to deviate from the population 


Iterated elimination of weakly dominated strategies

Involves eliminating all the strategies that we should never use, respectively that will definitely not help us win a game 




Which brain parts control our fairness + greed ?

Left + right dorsolateral PFC

--> right is involved in rejecting unfair offers


Public goods dilemma 

Public goods dilemma refers to a real-world decision whereby the outcome for any individual depends on the decisions of all involved parties


ex.: Prisoners dilemma 


Downing strategy 

1. Begins by defecting, because one assumes the other party will be unresponsive for ones choice

2. Then checking for the actual response resulting in:

  •  support of cooperation, but punishment of defection (like tit for tat)


BUT: Assumption of unresponsiveness will lead downing to get punished for its early defection; cooperation will most likely not occur 

--> used for public good dilemmas


Appraisal theory 

States that emotions are adpative responses based on how you evaluate the situations you're in 


Counterfactual thinking

(Upward vs downward) 

1. Upward: "Could have been better"-mindset 

--> associated with an increase in cooperation, in the next round



2. Downward: "Could have been better/Thats better than expected"-mindset 

--> associated with a decrease in cooperation, in the next round 



=> Individualists will find a balance between upward + downward counterfactual thining 





Refers to a research field that combines the studies of 


a) economics

b) social neurosciences 

c) psychology 


--> discovered that the Reward systems + brain areas for trust are involved 


--> e.g.: striatum, PFC