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Another insight from the book "The Wisdom of Crowds" by the author James Surowiecky comes from the empirical tested outcomes of this game, "... perhaps the most-well-known experiment in behavioral economics"'' .

In this game there are two players, the proposer p and the responder r and an amount of sharable money m, say m=10$, that can only be gained, if p and r come to an agreement.

The proposer p now can offer an arbitrary split of the money m=mp+mr, with 0<=mp<=m, which the responder can accept or decline.

If r accepts, then p gets mp dollars and r gets mr=m-mp dollars. If r declines, then both get mp=mr=0, i.e. zero dollars.

Example

If p (being socially very insensible) offers a split of (9$,1$), with the intention to keep mp=9$ for him-/herself, leaving the shabby mr=1$ to the responder, then experience shows, that usually p is punished by the responder of rejecting the offer, where at the same time the responder r is punishing her/himself with losing the opportunity to earn one dollar.

The surest bet for p to come to an agreement is offering an even split of (5$, 5$).

This game can be easily generalized to

Application

To apply this basic insight to SocialDomaining as ExtremeOpenBusiness, here are some additional considerations:

Invitation to Conversation and Participation

FridemarPache: Yes, this is a real economic game with real money and real business opportunities, all transactions made visible and open; besides that, it is a real thing to reflect on it.


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