The Ultimatum Game- Are people rational?

Jacob Clifford introduces a classroom activity called the Ultimatum Game, aimed at teaching behavioral economics. The activity involves students making decisions about splitting bonus points, highlighting concepts like rationality, fairness, and opportunity cost. The video provides detailed instructions for teachers on how to conduct the activity and discusses the economic insights gained from it.

What is the main objective of the Ultimatum Game?

• To understand market equilibrium

• To calculate profit margins

• To explore decision-making and fairness

• To teach students about supply and demand

Why is it important to keep the Ultimatum Game double-blind?

• To ensure students do not know the rules

• To make the game more challenging

• To increase the number of participants

• To prevent bias and ensure fairness

What is the role of the first partner in the Ultimatum Game?

• To calculate the total points

• To observe the game

• To decide how to split the bonus points

• To accept or reject the offer

What economic concept does the Ultimatum Game help illustrate?

• Market competition

• Opportunity cost

• Price elasticity

• Supply chain management

According to traditional economics, how should the second partner in the Ultimatum Game behave?

• Reject any offer less than half

• Accept any offer, no matter how small

• Negotiate for a better deal

• Refuse to participate