Okay folks, it’s time to test your sanity levels and, to do so, we’re gonna play a little game. The first thing you’ll need to do for this game is two partners. Let me be clear on this, your partners can be imaginary if you want them to be (as long as you don’t mind childish jokes about playing with yourself) so long as you really put yourself in these situations and do what you’d really do. Now I want you to follow these steps:
- Take ten single notes or coins of the smallest currency you have and give them to the Partner A. Tell them that they can keep the money if they follow the rules.
- Tell Partner A that he must share that money with the Partner B and that he has to give a minimum of one note/coin to them. The partners cannot discuss how much will be given.
- Once the money (or biscuits or whatever you’ve chosen) has been given from the first partner to the second, tell the Partner B to decide if he was given a fair amount. Tell him that if he doesn’t think it was fair then Partner A will lose his entire share but Partner B wont get any more.
- Reshare the biscuits if needed and then give Partner A one final option. If Partner A has nothing left then he can have Partner B’s profit taken from him too. Again, Partner A doesn’t receive anything else and should be made aware of that.
And that’s the game. Fun eh? No? Well how about revealing then? You see, Partner A is the one with all the power at the beginning and all the money belongs to him. He has to decide how much to give Partner B. If Partner A is completely rational and not influenced by anything, he’ll give Partner B only one coin/note/cookie/prostitute because that is the minimum that he has to part with to keep the rest for himself. When Partner B gets to his part the power is given to him. He can decide that Partner A goes home with nothing if he wants to. If Partner B is completely rational he wont ever decide that no matter how much Partner A has, because Partner B has made a profit no matter how little he gets. Theoretically we shouldn’t have to redistribute the biscuits/donkeys/tickets to Cats performed by the cast of Falcon Crest at all with two rational partners and shouldn’t have to give Partner A the final option, and yet we’ll just imagine we’ve gotten to that point for arguments sake. So Partner A has nothing left and Partner B has whatever Partner A thought was a fair share, and now Partner A can make sure Partner B ends up with nothing too. If Partner A were rational he’d let Partner B keep whatever he had because there’s no rational reason to take anything from Partner B.
So, how did your game play out in comparison to how it should have? Was anything slightly different from how the game would have been played by rational people? Yeah, the problem is that this particular game is designed to test your sanity levels not how rational you are, and part of sanity is emotion. It’s all but impossible to maintain a healthy range of emotion in a situation like this while still remaining perfectly rational, which is one of the reasons that Game Theory is constantly evolving in an attempt to prove itself. Playing the game rationally would end up exactly as I described, yet people would be ignoring suspicion, envy and a myriad of other healthy emotions that make them screw each other over when playing the game sanely.