2.6 Chapter 2: In-Class Activity-The Ultimatum Game

Would YOU be willing to give up what you believe to be rightfully and fairly yours....in order to gain more than you have right now?

The Ultimatum Game is part of economic game theory....  If resources are a "zero-sum" game, then it means only one stakeholder takes everything.  

What if it isn't that way?

For this class activity, you will need to find someone (preferably a total stranger) to challenge.  Both of you will be given ten 1 dollar bills- placed on a table in front of you.

1.  The ten dollars can be split any way you guys choose.

2.  However, BOTH stakeholders must agree on the split.  For example, if both of you agree to an 80-20 percent split- then that's how it will be split.  

3.  If one stakeholder doesn't agree to the proposed split, neither party gets anything.

What does this have to do with managerial decision-making?  

Managers are constantly asked to make decisions with limited information and resources.  What happens when managers use their "reflexive" brain to make complicated decisions?  It might mean they only consider SOME of the facts or circumstances.  It might mean they don't consider the long-term effects of their decisions.  This could take the form of refusing to compromise...and walking away with nothing at all.

Achieving SOMETHING is better than achieving NOTHING,

Most students will complete this assignment in class.  However, if your purpose is to make up this assignment, you'll need to stay after class to conduct this experiment..and then write about it.