Monday, February 17, 2020


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Having devoured a quantity of the better pop social science texts on offer throughout the past two decades, I've lost count how many times I've come across discussions of the ultimatum game.  Now, if you have better taste in books than the EGD, then you might have read about it college (or not) or otherwise not be familiar with it.  So here' s quick primer.

Basically, the ultimatum game is a way of testing the limits at which a person will forgo a material reward for the satisfaction of depriving another of an undeserved benefit obtained at the test subject's expense.  Or, in less fancy terms, it looks at what it takes for a person to cut off her nose to spite her face.

Although there are different iterations of the ultimatum game, probably the most common example works with two test subjects.  The tester gives the first person ten $1 bills, with the instructions that the first person must offer some of the money to the other person, and if the offer is accepted then they both keep the money.  But if the second person refuses the offer, then neither person keeps any of the money.

For someone like me, the ultimatum game isn't much of a game at all.  Offer $5.  That's a perfectly fair split, so there is no reason for the other person to turn it down.  But if you're one of 57% of Americans who define themselves as greedy (or whatever additional percentage is greedy without acknowledging it) this country is cursed with, then the trick is figuring out how much less than $5 to offer to the second person so you can keep more of it for yourself.

So the answer is $1, right?  You have to offer at least one of your dollar bills, so if you just offer $1 then you get to keep $9 and certainly the other person will accept because otherwise they get nothing--and hey, $1 is better than $0?

Well, as you might imagine, offering $1 is usually the surest way to end up with zilch.  Turns out lots of people value their dignity and self-respect at more than $1.  This part always drives economists nuts because they are all about rational actors maximizing their utility and shit.  If you're the second person, then--according to an economist--you should always accept whatever is offered.  This wouldn't be the only reason not to listen to (most) economists.

Hence the studies usually show that fair offers (however defined, in our example $5 would be the fair offer) are practically a lock and the most lopsided offers ($2 or less, in our case) are routinely declined.  What this means for the greedy MFs is that there's usually a sweet spot to be found somewhere in the less-than-fair-but-not-egregiously-unfair zone.  Somewhere above $2 people will start taking the money, even if they may not be pleased with what's on the table.

The most celebrated point from Donald Trump's shitty book, Art of the Deal, is essentially based on these dynamics.  The idea is that you start off the negotiations with some outrageous position (say, $1 of the $10) so that the other party will supposedly be more willing to accept a future offer that is still unfair but not (or less) outrageous (say $2 of the $10).  The Donald evidently had some success with this strategy (in between his multiple bankruptcies), so the Wall Street types declared it brilliant.  But the problem with this "strategy" is that it only works in situations like the ultimatum game: i.e., where you have all the leverage and the other party has no choice but to deal with you.

An outrageous opening offer is not going to cut it where the other party has other options--they'll just go find a better deal somewhere else.  And even without other possible partners, in a balanced negotiation the other side isn't likely to accept an unfair offer just because you started in the ridiculous zone.  So Trump's most bigly brainwave isn't really about true negotiation at all, but about how to about how to screw people most effectively when you've got them totally over the barrel: such as all the everyday workers and contractors Trump stiffed over the years.

Of course, we all know Trump is a dirtbag who will steal whatever isn't nailed down (and plenty of what is).  But there is another ultimatum game brewing on the other side of the political aisle now that fellow greedmonger Michael Bloomberg has entered the race for the Democratic nomination.

Bloomberg was himself a Republican throughout the large majority of his years, leaving the party only in mid-2007.  He's basically what used to be considered a "conservative" before the radical right-wing coopted the term: a guy who believes in capitalism, markets, privatization, and free trade, who disdains most social programs, and is generally indifferent to civil rights.  To his credit, Bloomberg has been an outspoken advocate for gun control and some environmental protection issues.  But he's far from progressive and downright opposed to the interests of workers, people of color, and lower-income households.  Picture, say, a George Bush Sr. who cares about the environment.  Or a Bill Clinton who hates unions and is into racial profiling.

So what is this guy doing, running for the Dem nomination? And running he is--it's tough to click on anything on-line lately without getting a damn Mike 2020 ad popping up.  And the ads seem to be working; has him running third or even second behind Sanders in a number of Super Tuesday states--and since those same projections also tend to show Joe Biden in the running, it's a good bet Bloomberg is actually doing better than the projections suggest.

Better yet, what are supposed Dem voters doing supporting the guy?

Ultimatum game.  When the opening "offer" is four more years of Trump, even Bloomberg and his deeply anti-worker platform seems like a decent alternative.  And that does make a certain degree of sense; if DT is the $1 offer, then you double your money voting for Bloomberg's $2 deal.  It's also pathetic.  There is always one sure way not to succeed and that is to give up on it without even trying.  It's easy to be depressed and frustrated with how terrible things have become under Trump.  But that no reason to resign ourselves to a Bloomberg presidency, a prospect that necessarily allows for at most a partial reversal of the Trump-era damage.

Granted, the Democrats are a classic "big tent" party and not every Democrat actually wants things like single-payer health coverage, education without crippling debt, or a green new deal.  They should, but that's for another day.  Until then, maybe we can presume they value a Bloomberg presidency at $3, or maybe even $4.  Well, that's still not a fair deal. A fair deal is $5.

And that means anything less than $5 is not fair.  There are gradations if unfairness, yes--but "less unfair" is still unfair.  And it takes some degree of shitty person to even be out trying to discover how unfair they can go.  Indeed, the only real difference between somebody who offers $1 and, say, $4 isn't that the latter person is less greedy--only more intelligent.  That person would be offering you $1 too if he thought you'd actually accept it.  Donald Trump wrote a damn book about it.

Fortunately, the studies show plenty of people still have enough self-respect to walk away from a $2 offer just the same.  And that is precisely what Democratic voters need to be doing now, because we are not not in the ultimatum game yet.  Nominating Warren or Sanders would enable the Democrats to both defeat Donald Trump and pursue legitimately pro-worker, pro-family, and pro-environmental policies.  Let's get our full $5.

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