The article explores the dynamics of zero-sum bargaining through the lens of the ultimatum game, highlighting how players often prioritize fairness over rationality. Despite game theory's predictions of accepting any positive offer, real behaviors show a tendency to reject low offers due to perceived unfairness. In addition, the article mentions modifications to the game that help understand decision-making in uncertain conditions, demonstrating that real-world negotiations frequently involve complexities not captured in traditional game theory.
No one likes an ultimatum - literally 'the last' offer - but we often take them, especially if the implied threat in case of refusal is credible.
The ultimatum game is widely accepted as an elegant experimental way to study zero-sum bargaining... Alas, many, if not most, real-world bargaining situations are murkier.
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