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RSA Animate - Superfreakonomics

entr0py says...

I've got to agree with Peroxide, this was interesting while I was listening, but the more I think about it the more I suspect the experiments were mostly rubbish. One big problem with these kinds of experiments is that they always deal with trivial amounts of money. This almost completely eliminates economic motivations, and just leaves emotional ones.

Here's an example from the ultimatum game. We're told that when person b is offered an insulting split, like $9 and $1, they will almost certainly reject it. This is because the satisfaction of spiting the dick that wanted to give you only $1 is easily worth $1. But imagine if instead the game were played for $10,000 and they were offered a $9,000 to $1,000 split. I think you'd see virtually everyone willing to swallow their pride for that amount, especially with the anonymous setup of the experiment.

The dictator game suffers from the same problem. But also, if I were a subject I'd believe that there is very little chance person b even exists. Why would they if their only part in the experiment is to collect a set amount of money and be sent on their way? This becomes all the more obvious when the experiment is altered to suggest you can 'steal' up to $10 from this other subject.

The economic decisions that we make with large sums of money are not at all the same as the ones we make with piddling sums. Also, we're not idiots.

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