The Ultimatum Game
Imagine that you are sitting next to a complete stranger who has been given $20 to share between the two of you. He must choose how much to keep for himself and how much to give to you.
He can be as selfish or as generous as he likes, with one proviso: if you refuse his offer, neither of you gets any money at all.
This is the “ultimatum game.”
If the sum is less than $5, four out of five of us tell the selfish so-and-so to get lost. We get so angry at his deliberate unfairness that we are prepared to incur a cost to ourselves to punish him.
Ernst Fehr and Daria Knoch used a technique called transcranial magnetic stimulation to tire out and thus temporarily suppress a part of the brain called the dorsolateral prefrontal cortex (DLPFC). Functional magnetic resonance imaging scans show that this is particularly active when people play the ultimatum game.
When the right DLPFC is shut down, the way they play starts to change. When given a low offer, they still feel it is deeply unfair. But, instead of rejecting it as they usually would, their selfish, ultra-rational side wins out over their emotional reaction against the other player’s meanness. They accept any amount of cash, however small.
The implication is not that the DLPFC is generating a sense of injustice — that was still there even when the region was knocked out. Rather, it seems to be more like an executive decision-maker, balancing the claims of emotion and reason.
Our decisions seem not to be determined mainly by reason, but by a continuous battle between two sides of our psyches that are rooted in different mental circuits.
One of these is rational, controlled by the cortex — the cauliflower-like outer section of the brain where reasoning takes place, which is uniquely developed in humans. The other is emotional, governed by the limbic system — the deeper-lying brain structures such as the amygdala that are much closer in character to the brains of other mammals.
The DLPFC does not develop fully until early adulthood, offering a possible explanation for adolescent selfishness.
Colin Camerer explains that if we always accepted low offers for the sake of tiny gains, we would rapidly get a reputation as a soft touch. By acting apparently against our interests, we do better in the long run: “Emotion is nature’s way of letting people know that if you’re treated badly you’ll do something about it.”
“Why say no to free money? It’s neuro-economics, stupid” by Mark Henderson