Ultimatum

Maybe it's that I've been reading too much non-history, non-fiction lately. Or maybe the topics are just too...shall we say...inbred. But I've bumped into enough mentions of a game called "Ultimatum" that it's stuck with me. The word "game" is a misnomer, at least in the sense that Ultimatum is nothing you'll find keeping Monopoly company on the closet shelf. It's actually played by those who've volunteered for psychological studies in universities and other institutions that study human interactions in factor-controlled circumstances.

The basic premise starts with two people. Person A is given a fixed dollar amount (usually ten bones in the cited examples) to be split with the other person. There is no negotiation--Person A makes a take-it-or-leave-it offer for Person B. The catch is that if Person B refuses, each person receives zero.

The classical economics they teach you in high school and college would predict that even if Person A offered Person B one cent and kept the remaining $9.99 for her/himself, Person B would still have a penny more than s/he had before, and would therefore accept. Because something is always better than nothing, riiiight???

As it turns out, capital-R reality doesn't exist to fulfil the premises of classical economic thought any more than it does, say, story problems in Math. Because the ultimate result was that a low-ball offer basically meant that Person B had very little to lose, either. And, maybe it's just because the Puritans gained such an early toe-hold in the American psyche, but the impulse to punish high-handed greed is fairly strong, too. In practice, 50-50, 60-40, and even 70-30 splits had a fairly high likelihood of being accepted. But once a threshold of "unfairness" was crossed...not so much.

The metaphor to the current state of the U.S. economy (and political state) seems all-too-obvious...

• As banks sit on hundreds of billions of dollars of bailout-backed credit
• As corporations hoard even more than that in profits, waiting for someone else to create the jobs...and demand for their products.
  
• As pay is not so much a fraction as it is a logarithmic base of productivity
• As the cost of a college degree rises in tandem with offshoring and union-busting
  
• As pernicious unemployment and foreclosure rates undermine consumer confidence...and spending
  
• As we expect an entrepreneurial "creative class" to spontaneously emerge from generations taught to standardized tests
• As gerrymandering and astro-turfing polarize the electoral landscape
• As the concentration of wealth into a shrinking pool of bank accounts further tilts the political and legal table
  

Remind me again, what's the point in earning good grades, putting in your 40 hours, paying your taxes, financing your upward mobility, investing for your long-term financial security, voting on schedule, etc.? At some point, the Social Contract has to be a win-win, rather than the game of Ultimatum that's it's rapidly becoming.

If, en masse, the American worker/consumer walks away from the deal, it might actually be good on some levels. Among them decreasing personal debt and a mom-n-pop entrepreneurial boom, and maybe--just maybe--an increased focus on quality of life. But apart from that...boom. The pity is that those who play the role of Person A in this "game" they're playing will not walk away with nothing. At best, they'll be less-rich. Once again demonstrating how freakishly carefully-controlled lab results can mutate in the wild.