Quote from: tomcollins on April 21, 2011, 05:54:19 PM

Quote from: estevo on April 21, 2011, 05:46:50 PM

Quote

How is it different? Because in one case there is a "rightful" owner, and the first case, the money appears to be "shared" at one point in time?

Very precisely. You think that shouldn't matter?

That is also why, in a subtle sense, db's framing makes the problem different.

I have insisted you don't necessarily treat this as a game theoretical abstract problem where utility is perfectly encoded in the monetary payoff and your job is just to maximize that. That is, not unless that's how you honestly would frame it in real life.

The purpose of the thought experiment is exactly to explore how real human emotions and perceptions, and how real social dynamics, transform a problem which otherwise (that is, in an abstract game theoretical formulation) would have a clear unambiguous solution, invariant from all the different framings that maintain the same monetary reward structure. That is, to explore the difference between rationality as formally defined in game theory and what makes sense to you in real life.

Whether you choose to call the latter "rational" or not is a matter of definitional nuance and not the main point.

Oh, I'm aware of human emotions being quite irrational (a lot of people would rather be the richest person in a very poor country than the poorest person in a very very very wealthy country, even if the poorest guy has a lot more stuff than the richest guy). Envy is a huge human emotion. I just find it to be a huge weakness and not a characteristic I admire at all.

It's all about how people want to punish the person offering the deal. Why do they deserve punishment? What are they doing unfairly? What are you owed by them? Who are they harming by offering you a low offer?

People hate when other people get something for free and they do not. Therefore they'd actually pay a fine to make sure no one else got free stuff. It's borderline sociopathic to me, but it's part of many peoples personality.

If I was playing this game as the person making the offer, I would do my best to try to determine what is the lowest payout my opponent would take. Then I would try to figure out how certain I was at each level. If I was 99% sure he would take an even split, and 80% sure he'd take 3000-2000, I'd go with the even split. If I had to deal with this person again, I'd offer more than if I never saw him again. If I was certain he was rational and not spiteful, I'd offer him a penny. If I was receiving the bet, I would try to make sure the person negotiating thought I was as crazy as possible and that I was capable of spite. Hell, I'd even try to convince him I wouldn't even take half. I don't need the money that much, so it's not worth my trouble unless he gives me $4k. Then I'd accept any offer he throws my way. But I would definitely not let him know that while the game is being played.

But the idea that someone wants to take away a huge sum of money from someone else just because they didn't give you enough seems almost mentally ill to me. Any amount over a trivial sum would be considered a gift and insurance that his opponent is not a fool.

Show me how it's irrational to reject an offer. Is it irrational to pay to go to Disney world? It causes a loss in financial standing to only satisfy some psychological need. What's the difference?