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What's the ultimatum game? · Stuff You Should Know

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  Speaker 1: Brought to you by the reinvented two thousand twelve camera.
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  Speaker 1: It's ready. Are you welcome to Stuff you should know
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  Speaker 1: from House Stuff Works dot Com. Stuff you should know
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  Speaker 1: the podcast. Josh Clark, Chuck Bryant. Here. How's it going, Chuck?
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  Speaker 1: It's going great, Josh. You I'm doing pretty good. I'm
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  Speaker 1: doing pretty good. I've often wanted, Chuck, if you won
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  Speaker 1: the lottery, like, who would you share any of your
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  Speaker 1: proceeds with? I mean, would you? Obviously your wife Emily
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  Speaker 1: would would reap the benefits of this um, But I mean,
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  Speaker 1: is there anybody else, like your parents? Would you buy
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  Speaker 1: him a boat? Or you know who would you share
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  Speaker 1: it with? In in what amount? Have you ever thought
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  Speaker 1: about that? Yeah? Yeah, I think everyone kind of thinks
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  Speaker 1: about this. I don't play the lottery, first of all,
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  Speaker 1: because I think it's a suckers game. But if I
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  Speaker 1: found a lottery ticket and won a lot of money,
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  Speaker 1: I would be pretty generous, I thinky okay. I've always
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  Speaker 1: liked to think the same thing, um to the to
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  Speaker 1: the to the point where you know, I kind of
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  Speaker 1: have allotments of like, you know, who would get what
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  Speaker 1: based on how much I won? Um. The thing is,
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  Speaker 1: it's all kind of esoteric at this point. Everyone's generous
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  Speaker 1: in theory. Yeah, and I wonder how much that would
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  Speaker 1: change with cash in hand. Um. And I was actually
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  Speaker 1: reading an article about a guy who's in Melbourne who
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  Speaker 1: this actually happened to. Uh. One of his friends off
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  Speaker 1: handedly suggested, uh, he buy a lottery ticket, and the
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  Speaker 1: guy went in, bought it and actually won thirteen million dollars.
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  Speaker 1: He's got the money in hand and he's still sharing
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  Speaker 1: it with his buddy who just suggested he buy a ticket.
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  Speaker 1: You know. So, um, it is nice. But at the
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  Speaker 1: same time, uh, this guy's actions flying in the face
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  Speaker 1: of all theories and all sorts of different disciplines evolution, economics, games, Arie.
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  Speaker 1: Have you heard of this guy named Ariel Rubinstein? I
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  Speaker 1: have I like all Ariel, do you? Yes? He seems
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  Speaker 1: like a pretty approachable guy from what I understand that
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  Speaker 1: he came up with this thing called the ultimatum game
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  Speaker 1: in the early eighties. I think, yeah, something like that,
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  Speaker 1: uh and he UM. Let me just give a quick
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  Speaker 1: rundown of the ultimatum game, okay, okay, So basically, uh,
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  Speaker 1: some guy comes up to you and I chuck and
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  Speaker 1: uh hands uh hey, hands you twenty one dollar bills
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  Speaker 1: and he says yeah. I'd say, chuck, come back, and
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  Speaker 1: that guy would be like, where what's your friend's name?
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  Speaker 1: And I'd be all like, I don't know, I don't
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  Speaker 1: know him. You know, I just met him at number
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  Speaker 1: sixteen bus shelters. Somebody would get those one dollar bills, right. So, well,
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  Speaker 1: let's say you did stick around. Your curiosity was peaked
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  Speaker 1: because some stranger came up and gave you twenty one
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  Speaker 1: dollar bills UM, and he had some instructions that went
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  Speaker 1: along with it, UM, namely that you had to split
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  Speaker 1: it with me in any way you saw fit. I
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  Speaker 1: had the ability need to reject any offer you gave me.
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  Speaker 1: But if I reject your offer, then neither one of
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  Speaker 1: us gets squat. He takes the twenty bucks back, right right,
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  Speaker 1: So I could give you a dollar keep nineteen. You
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  Speaker 1: could say no, thanks, jerk, and uh, the guy takes
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  Speaker 1: his money back. Right. But the thing is under under
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  Speaker 1: this thing called rational maximization, which is an economic theory
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  Speaker 1: that basically all people are out for the most for themselves.
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  Speaker 1: You shouldn't even be concerned with the idea that I
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  Speaker 1: would reject your offer. Number one, you should give me
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  Speaker 1: one dollar because that's the least amount you have, right um.
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  Speaker 1: And secondly I should take it. It's found money, and
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  Speaker 1: that should be that you got nineteen I've got a dollar.
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  Speaker 1: I may be mad at you, but still I didn't
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  Speaker 1: do anything for the buck, right, Um, So that makes
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  Speaker 1: perfect sense in theory. Uh. And Ariel Rubinstein is very
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  Speaker 1: very well respected game theorists, except for this one. Just magnificent. Uh,
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  Speaker 1: just terrible predictions. Right, This is a blot on his record. Right.
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  Speaker 1: So these German economists put it to the test, put
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  Speaker 1: the ultimatum game to the test in real life, and
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  Speaker 1: they found that they're they're what they What they found
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  Speaker 1: was that there was no support for Rubinstein's hypothesis whatsoever. Right, people,
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  Speaker 1: I think they found gave an average of thirty seven
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  Speaker 1: percent of the money away. And then what I thought
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  Speaker 1: was really interesting was that half of the people who
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  Speaker 1: uh received um or less would not accept it. They
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  Speaker 1: rejected the offer even though it was found money. And
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  Speaker 1: and in other cases there's there were more generous offers
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  Speaker 1: than there needed to be. Right. So if they got uh,
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  Speaker 1: let's say it was twenty deutsch marks, I guess now
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  Speaker 1: the euro, but back then it was deutch marks, they
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  Speaker 1: would give them three and they just threw it right
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  Speaker 1: back in his face exactly. Um, that doesn't make any
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  Speaker 1: sense again, right, So it was enough to get the
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  Speaker 1: curiosity of economists and mathematicians and and uh, you know
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  Speaker 1: all sorts of other people uh peaked right, um. And
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  Speaker 1: so they started looking into this and they're like, well,
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  Speaker 1: game theory, it makes sense, but there's there's a flaw
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  Speaker 1: here there. Let's tweak it a little bit. They tried variations, right,
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  Speaker 1: and one of the ones that they came up with
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  Speaker 1: was the Dictator game. Right. I like this one, Yeah,
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  Speaker 1: this this one makes a little more sense to me.
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  Speaker 1: And yet it's still just it doesn't make any sense. Basically,
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  Speaker 1: under the Dictator game, it's the same thing as the
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  Speaker 1: Ultimatum game, except uh, they give me twenty bucks to
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  Speaker 1: share with you. I can either take two dollars and
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  Speaker 1: give it to you and keep eight team for myself,
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  Speaker 1: or I can half the twenty dollars with you and
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  Speaker 1: and and split it equally. Either way, you have to
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  Speaker 1: accept the offer and I get to keep the money
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  Speaker 1: no matter what. So there's there's there's no loss for me.
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  Speaker 1: And yet they found that like seventy six percent of
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  Speaker 1: the people who played the Dictator game split the twenty
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  Speaker 1: bucks in half, even though they knew that if if
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  Speaker 1: they gave the other person two bucks they got they
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  Speaker 1: kept eighteen. And as far as I know, these people
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  Speaker 1: are actually keeping the money to make this a very
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  Speaker 1: real thing, to really gauge people's reactions, and and the
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  Speaker 1: vast majority of the people were splitting things evenly. This
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  Speaker 1: is mind boggling, don't you agree it is? But you
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  Speaker 1: know it was Germany and it's called the Dictator game,
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  Speaker 1: so that if they made a little bit of afraid
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  Speaker 1: on what was to convert exactly with their rib turtleneck sweaters.
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  Speaker 1: And yeah, so um this further piqus people's curiosity. Like
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  Speaker 1: Rubinstein inadvertently just set off this huge chain reaction that
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  Speaker 1: people's entire careers have been built on his one prediction
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  Speaker 1: of the Ultimatum game. Right, Um, so they start they
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  Speaker 1: start looking into theories about sharing and altruism. And we
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  Speaker 1: actually did a podcast how altruism works based on an
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  Speaker 1: article called is there such a thing as a truly
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  Speaker 1: unselfish act? And altruism shouldn't exist, you know, rational maximization
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  Speaker 1: should be has it falls in line with evolutionary theory.
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  Speaker 1: But I mean, so, what is that the human spirit?
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  Speaker 1: Or is that something we've developed? No one has any idea. Um,
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  Speaker 1: and and they we don't even know if it's human. Actually, um,
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  Speaker 1: they've done some studies. They did one on chimps and
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  Speaker 1: they show zero. Uh, they don't show any sense of fairness.
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  Speaker 1: They don't mind if they're if they're getting screwed out
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  Speaker 1: of something, as long as they get something. They don't
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  Speaker 1: care in what amount or how much someone else is getting.
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  Speaker 1: But other monkeys have shown a sense of fairness, specifically
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  Speaker 1: the cappuccine monkey. Yeah, this is a cool study. Did
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  Speaker 1: you ever see Monkey Shines? Uh? No, you didn't see
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  Speaker 1: Monkey Shines? Okay, well, wow, it was pretty good. Actually
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  Speaker 1: it's a it's a horror movie about a out of
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  Speaker 1: control helper monkey who just goes on the rampage like
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  Speaker 1: Silent Night, Deadly Night, except with the monkey. That's exactly
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  Speaker 1: why I didn't see it. No, thank you, it was okay. Um, well,
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  Speaker 1: basically this is the same kind of monkey, and they're
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  Speaker 1: very smart and they're off news for helper monkeys. Um.
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  Speaker 1: And these researchers just down the road apiece at Emory
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  Speaker 1: University ran this experiment on them, and so they would
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  Speaker 1: put some monkeys together and they'd have them get the
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  Speaker 1: retrieve a pebble, and in return for bringing the researcher
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  Speaker 1: a pebble, both monkeys would get cucumbers. Uh. Now, I
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  Speaker 1: for a while, one monkey would would get a grape
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  Speaker 1: in return for retrieving a pebble, while the others still
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  Speaker 1: got cucumbers. So one monkey's kind of like, you know
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  Speaker 1: what's going on. And then after a while, while one
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  Speaker 1: monkey still had to retrieve a pebble to even get
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  Speaker 1: a cucumber, the other monkey was getting grapes for doing nothing.
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  Speaker 1: And this led to monkeys getting upset, yeah, throwing food,
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  Speaker 1: refusing to play and really, I mean, like capucine monkeys,
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  Speaker 1: if you've never seen when you really have to go
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  Speaker 1: onto h what's the ultimatum game on how stuff works?
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  Speaker 1: If they're the cutest things on the planet, I can't
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  Speaker 1: imagine seeing one of these just acting hurt. Yeah, it's
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  Speaker 1: kind of a mean experien a man. It happened just
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  Speaker 1: down the road. But apparently it let us know that
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  Speaker 1: humans aren't the only ones with this higher mind sense
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  Speaker 1: of fairness kind of thing. Ultimately, though, we still have
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  Speaker 1: no idea what's going on, right. I did think it
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  Speaker 1: was interesting interesting that um people that participated in the
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  Speaker 1: in the game, they they found that they looked for
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  Speaker 1: nonverbal cues from their partner in the game to try
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  Speaker 1: and pick up what they think they should give. And
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  Speaker 1: it kind of made me think, you know, any study
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  Speaker 1: where you know you're being studied I kind of have
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  Speaker 1: not problems with. But you wonder, you know, if I
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  Speaker 1: knew that someone was giving me this twenty dollar bill,
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  Speaker 1: I would give away half of it just so wouldn't
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  Speaker 1: mean it wouldn't seem like a schmuck, right exactly. It's
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  Speaker 1: like Heisenberg's uncertainty principle. You know, just by observing something
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  Speaker 1: you change its behavior. Uh. And I wonder how much
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  Speaker 1: that factors into this too, And that that nonverbal cue
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  Speaker 1: study you were talking about it seemed a little hinky
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  Speaker 1: to me. I wasn't sure how much faith I put
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  Speaker 1: in it, But I wonder how much of that lack
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  Speaker 1: of faith is driving just the the idea that that's
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  Speaker 1: just such a depressing um notion that we're really all
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  Speaker 1: always in fact out for ourselves and trying to rationally maximize,
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  Speaker 1: and we're actually doing it through non verbal cues sizing
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  Speaker 1: up how generous we think the other person will be
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  Speaker 1: for a big payoff later on. Like you and I
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  Speaker 1: are walking down the street and I see a twenty
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  Speaker 1: on the ground. I looked as I pick it up,
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  Speaker 1: and then I look to see if you saw me
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  Speaker 1: pick it up pretty much and maybe if I notice
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  Speaker 1: you saw me, I'll share it with you. If you
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  Speaker 1: didn't notice, then what twenty? Right? And even if even
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  Speaker 1: if you just kind of go across the board and
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  Speaker 1: help everybody equally, just as a general rule, how much
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  Speaker 1: of that uh is based on a belief in karma,
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  Speaker 1: you know, karmic deck, karmic payback, that kind of that
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  Speaker 1: you think that you're going to ultimately receive a rule
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  Speaker 1: and that's why you do it, which leads us back
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  Speaker 1: to you know that altruism definitely, which apparently doesn't exist,
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  Speaker 1: And I don't know, I figure five ten years down
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  Speaker 1: the road will have the uh the specific you know,
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  Speaker 1: edit code for altruism or are faking of altruism down? Well,
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  Speaker 1: I do know if someone came and gave us twenty
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  Speaker 1: one dollar bills and we'd probably head down to the
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  Speaker 1: dance club and every everything would be fine. We'd probably
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  Speaker 1: we wouldn't split it evenly. We just go ahead and
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  Speaker 1: throw it on stage at the same time. Exactly, Okay,
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  Speaker 1: that's yeah, exactly. Well, this is a pretty dense topic.
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  Speaker 1: It's a really interesting article. I suggest you guys go
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  Speaker 1: read it What's the Ultimatum Game on how Stuff Works
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  Speaker 1: dot Com and stick around to find out which article
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  Speaker 1: has chucked very nervous for next week? So, Chuck, what
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  Speaker 1: article has you very nervous? Well, Josh, next week, I'm
• 11:41
  Speaker 1: going to visit the in laws in Akron, Ohio, and
• 11:44
  Speaker 1: we have plans to go to Cedar Point Suited Point,
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  Speaker 1: which is the greatest amusement park on the planet. That's
• 11:50
  Speaker 1: what I've heard. My wife has been touting it as
• 11:52
  Speaker 1: for years. You gotta go on the Millennium Coaster. It
• 11:55
  Speaker 1: is the scariest experience you will ever go through. You're
• 11:58
  Speaker 1: basically falling four forward as you go down this um,
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  Speaker 1: I think ninety degree or maybe more than ninety degree hill.
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  Speaker 1: It's it's mind bending, lee scary. I can't wait, and
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  Speaker 1: I love roller coasters, but it does have me a
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  Speaker 1: little worried. In the article that we have on our website,
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  Speaker 1: what if I were on a roller coaster and the
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  Speaker 1: safety harness broke by our our veteran writer Katherine Hear, Yeah,
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  Speaker 1: I don't know that you should read that before you go.
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  Speaker 1: You might want to save that work for after. Good idea. Yeah,
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  Speaker 1: so you can find out what would happen if the
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  Speaker 1: safety harness broke while you're on a roller coaster on
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  Speaker 1: how stuff works dot com. But again, like Chuck, I
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  Speaker 1: advise you to read it after you get back from
• 12:34
  Speaker 1: the amusement park for more on this and thousands of
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  Speaker 1: other topics. Is it how stuff works dot com? Let
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