Testosteronomics
In the ultimatum game, one player divides a pot of money between himself and another. The other then chooses whether to accept the offer. If he rejects it, neither player benefits. A stingy offer (one that is less than about a quarter of the total) is, indeed, usually rejected.
One explanation of the rejectionist strategy is that human psychology is adapted for repeated interactions rather than one-off trades. In this case, taking a tough, if self-sacrificial, line at the beginning pays dividends in future rounds of the game. (When one-off ultimatum games are played by trained economists they do tend to accept stingy offers more often than other people would.) Terence Burnham recently gathered a group of male students of microeconomics and asked them to play the ultimatum game.
Dr Burnham’s research budget ran to a bunch of $40 games. When there are many rounds in the ultimatum game, players learn to split the money more or less equally. He also ran a game of one round only, in which proposers could choose only between offering the other player $25 (ie, more than half the total) or $5. Responders could accept or reject the offer. Dr Burnham took saliva samples from all the students and compared the testosterone levels assessed from those samples with decisions made in the one-round game.
The responders who rejected a low final offer had an average testosterone level more than 50% higher than the average of those who accepted. Five of the 7 men with the highest testosterone levels in the study rejected a $5 ultimate offer but only one of the 19 others made the same decision.
A high testosterone level is correlated with social dominance in many species.