Economics

The game where 'free money' gets rejected on principle

In the ultimatum game, one player proposes how to split a sum and a second player can accept or reject it; a rejection means both get nothing. Classical economics predicts responders should accept any positive offer, yet people routinely reject offers below roughly 20-30%, sacrificing cash to punish unfairness — a result replicated across dozens of cultures worldwide.

Werner Güth, Rolf Schmittberger & Bernd Schwarze, An Experimental Analysis of Ultimatum Bargaining — Journal of Economic Behavior & Organization, 1982

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