Test: Assume you are given $100 and told to offer some of the money to a stranger. You may offer as much or little as you like, but if the stranger rejects your offer you each get nothing. How much would you offer?

Edit: the stranger knows that if he rejects you get nothing.

Why would the other person reject any amount of money? Does the person know you have $100?

If some stranger came up and asked if I wanted $1, just for nothing, I'd happily take it.

no homeless person or waitstaff member will refuse $100 dollars.

The other person knows that if he rejects, you get nothing.

I would bless someone with $100

I'd give all $100 under the stipulation for a mouth hug in return

Do I get to choose which stranger?
Because a homeless dude isn't going to turn down $1.

tamuangry said:

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The other person knows that if he rejects, you get nothing.

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So the only reason to reject is out of spite. This is a stupid test. Just don't give it to someone who hates you

Well if you and I were part of this test, and I offered you $50...I bet you would take it. But if I offered you $1, would you take the $1 or reject to punish me for proposing such an unfair deal?

Or, if the money on the table was $10,000...would you accept $1,000 if I offered?

tamuangry said:

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Well if you and I were part of this test, and I offered you $50...I bet you would take it. But if I offered you $1, would you take the $1 or reject to punish me for proposing such an unfair deal?

Or, if the money on the table was $10,000...would you accept $1,000 if I offered?

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i'd take the $1 and let you keep the rest... the money was never mine to begin with.

I'd go to a strip club. It's the same thing anyway.

Does the person know about the deal? If not
$25: it's enough to help the person out. Not enough to be suspicious or look like there are strings attached. Just go up to a restaurant around lunch and give them the cash to help pay for their lunch. Tell them to pay it forward sometime. Would work every time.

If they do know about the deal I would pony up half. So they won't reject out of spite.

If the amount was $10,000 that's a whole different story. I would offer $2,000. That amount is Enough that people will not reject the offer out of spite even if they do know about the deal but small enough that I still get to keep a lot of the money. No one except the really rich would ever turn down $2k. That's a nice vacation, paying off a credit card, a couple months rent, a down payment for a car. That's a lot of money to most Americans and even if they were not extremely happy about only getting 20% of the 10k most Americans would take it out of pure need for the cash.

I'd tell you to piss off for anything less than 75%.

In actuality behavioral economists have found people would count that as their money.

And yes, it does change in quantity. Bernoulli's theory had a lot of significant problems and this theory is much better and accounts for changes in quantity - https://en.m.wikipedia.org/wiki/Prospect_theory

If I could size up the person, my range would be $5-50 depending on how I stereotype them. If I had to do it blinded, I'd offer $20

$10 bucks to a hobo.. No hobo is going to turn down a bottle of vodka.

somewhat interesting question. As someone else mentioned, if the person is going to hold a grudge at being offered free money regardless of the amount he will reject. It is free money to both so in theory the person being offered the cash would take it and be happy with whatever amount he/she was given.

AggieSportsGuy said:

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In actuality behavioral economists have found people would count that as their money.

And yes, it does change in quantity. Bernoulli's theory had a lot of significant problems and this theory is much better and accounts for changes in quantity - https://en.m.wikipedia.org/wiki/Prospect_theory

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This. Aside from the absolute amount mattering, Kahneman and Tversky found that people will reject what they consider an unfair deal even if it makes them objectively worse off. If they know you have 100 and only offered them 5, they are pretty likely to reject the deal.

How about this as a test:

A client wants to pay you a retainer of $2,500 per month but, due to some conflicts on your end, you graciously turn it down. The client then insists you take the money and attempts to send you payment after the term of your engagement.

Your move.

Send it back... Tell him if the conflict didn't exist you'd happily work with him, but due to the conflict, sorry.

ColinAggie said:

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Send it back... Tell him if the conflict didn't exist you'd happily work with him, but due to the conflict, sorry.

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**any further payments will be assumed as donations to my favorite charitable cause or donations to my personal expenses.

Ulrich said:

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AggieSportsGuy said:

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In actuality behavioral economists have found people would count that as their money.

And yes, it does change in quantity. Bernoulli's theory had a lot of significant problems and this theory is much better and accounts for changes in quantity - https://en.m.wikipedia.org/wiki/Prospect_theory

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This. Aside from the absolute amount mattering, Kahneman and Tversky found that people will reject what they consider an unfair deal even if it makes them objectively worse off. If they know you have 100 and only offered them 5, they are pretty likely to reject the deal.

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Seriously? You hand me $1 and I have no problem with you getting $99. Heck, offer me $0 and I'll still accept. Doesn't affect me if you pocket a Benjamin.

Ragoo said:

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Do you trust your wife?

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I think she'd try to go behind my back and hamstring me.

ColinAggie said:

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Send it back... Tell him if the conflict didn't exist you'd happily work with him, but due to the conflict, sorry.

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Homeboy insists there is no conflict and has gone as far as saying he still will send checks. I had to send him a "it stops now" email.

agnerd said:

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Ulrich said:

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AggieSportsGuy said:

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In actuality behavioral economists have found people would count that as their money.

And yes, it does change in quantity. Bernoulli's theory had a lot of significant problems and this theory is much better and accounts for changes in quantity - https://en.m.wikipedia.org/wiki/Prospect_theory

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This. Aside from the absolute amount mattering, Kahneman and Tversky found that people will reject what they consider an unfair deal even if it makes them objectively worse off. If they know you have 100 and only offered them 5, they are pretty likely to reject the deal.

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Seriously? You hand me $1 and I have no problem with you getting $99. Heck, offer me $0 and I'll still accept. Doesn't affect me if you pocket a Benjamin.

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For you it's true, but people aren't uniform. Offer 99/1 or even 80/20 to a hundred people and a fair number of them will turn it down. I've forgotten the exact statistics and my copy of the book is at home.

If they know about the dynamics of the deal you'd have to offer more. Aside from that most sane people will take $5, maybe some even more so than a higher amount because higher amounts might come with strings attached.

tamuangry said:

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Test: Assume you are given $100 and told to offer some of the money to a stranger. You may offer as much or little as you like, but if the stranger rejects your offer you each get nothing. How much would you offer?

Edit: the stranger knows that if he rejects you get nothing.

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Does the stranger know that you were given $100? Or could you offer him say $10, stating you were only given $15?

The game is based on the premise that both parties understand the rules. From Wikipedia:

Quote:

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When carried out between members of a shared social group (e.g., a village, a tribe, a nation, humanity) people offer "fair" (i.e., 50:50) splits, and offers of less than 30% are often rejected.

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The first guy is given all of the money. The second guy is given all of the power.

Combine this with prospecting theory and you have end up with me telling you I want the lion share or you get nothing. Especially if we have the ability to negotiate.

Duncan Idaho said:

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The first guy is given all of the money. The second guy is given all of the power.

Combine this with prospecting theory and you have end up with me telling you I want the lion share or you get nothing. Especially if we have the ability to negotiate.

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Second guy only gets some of the power. First guy ultimately gets to decide the terms of the deal, second guy only gets to accept/reject. You demand more than half and the first guys decides it's unfair and you both get nothing.