More on Rationality

Found this article today on the Ultimatum Game, which I wrote about before. It's interesting, and some of the variations they made on the game refute a few of the ideas I suggested.

But I still stand by the idea that people aim to maximize their own utility. So even in the modified Ultimatum Games, people will reject low offers, simply because they don't feel it's fair, and they're essentially buying off their social "comfort" (for lack of a better word).

I don't know, I just find this stuff really interesting. Starting study of Game Theory tomorrow in Econ 101, so maybe I'll have some more interesting things to talk about shortly.

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Happy Father's Day

Happy Father's Day to the man who taught me so many things:
Happy Father's Day to the man who taught me math (with M&Ms!).
Happy Father's Day to the man who taught me the importance & value of reading.
Happy Father's Day to the man who taught me how to drive (and more importantly, how to drive a stick shift).
Happy Father's Day to the man who taught me how to pitch a tent.
Happy Father's Day to the man who taught me how to play chess, checkers, poker, and so many other games.
Happy Father's Day to the man who taught me the importance of caring for your belongings.
Happy Father's Day to the man who taught me integrity.
Happy Father's Day to the man who taught me that the world isn't always fair.
Happy Father's Day to the man who taught me to listen to what others had to say.
Happy Father's Day to the man who taught me to respect the views of others, whether or not I agree with them.
Happy Father's Day to the man who taught me to think critically, and form my own opinions (even though ours differ on some things).
Happy Father's Day to the man who taught me the importance of family.
Happy Father's Day to my Dad.

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Games

I love games. All my life, I've loved playing games of all kinds - card games, board games, random games my brothers and I would make up, etc. This probably comes from my dad, and his side of the family, because they would always play games as kids too. And growing up with three siblings, and lots of kids on our street who were similar in age, we always had people willing to play. So, I'm going to share my Top 10 games (of all kinds). As of now, they aren't in any particular order, because I do actually have to study, but I might come back and reorder them at some point.

Rock Band
This one should be a no-brainer to anybody who knows me. I love playing Rock Band, mainly because it combines my love for games with my love for music. Plus, since each "level" is just the length of a song, it's easy for me to just fire it up and play for 15 minutes before I head out somewhere. Usually, when I have a craving to listen to a song that I know is in Rock Band, I'll just fire up the game and play it!

Dodgeball
In high school (and even now, when I go home), my friends and I would go play dodgeball on weekends. We'd go find a public tennis court that wasn't in use, and my friend Zach would bring out the Water Polo balls that he had (his dad was the coach). Then we'd split up into teams, and play on the court, using the lines as boundaries, and the net as the dividing line, and play for a couple hours. Sometimes, we'd plug in a boom box, and blast music while we did it (techno makes surprisingly good dodgeball music!).

Zap Your Neighbor
This is a game that my dad and his friends came up with back in high school/college. They took an existing game, similar to Uno, and modified it, giving every card a function. The object of the game is to empty your hand of all cards - but there are lots of ways to get people to draw more and more cards. It's essentially Uno, but a LOT more fun (in my opinion). We played it a lot my senior year of high school (a lot meaning, every day in two or three class periods), after the AP tests, where it was affectionately called "Acid Uno". It is kind of slow-moving and complicated at first, but a real blast once you get the hang of it. I'm going to make the rules into a PDF file, and link to it from here later.

Air Hockey
I like all kinds of tabletop games like ping pong, pool, and foosball, but my favorite by FAR is air hockey. It's fast-paced, nervewracking, and intense. Whenever I go somewhere with an air hockey table, I always try to find somebody to play against. I'm not particularly good, but I love getting into the game anyways.

Pokemon (the Gameboy games)
I know people will judge me for this, but I don't care. These games are exceedingly complex in terms of the training and battle mechanics, and they are very deep games (in that there is a LOT to do). They have incredible replay value, and if you ever get bored, you can always start a new adventure. Because that's what these are - great adventure games. I don't bother with anything else the franchise does any more, but I like to get the new games when they come out - it's pretty much the sole reason I still own a handheld gaming system.

Scrabble
Despite being a math major, I do like words. I love Scrabble, and wish I could play it more often. There's not much to say about it - just a fun game that pushes you mentally. That, and it's always fun to drop a bullshit "word", and bluff your way out of having it challenged. =)

Capture The Flag
This game, and its many variants, has been a constant part of my life. We used to play a variant every other Friday in elementary school, and that was always a great thing to look forward to. In middle school, there would be days where we'd play a different version during PE, and it was probably the only activity that EVERYBODY would get into. Most first-person shooter video games have a capture the flag mode, which always requires a good amount of strategy. And my friends and I would sometimes play it out in the parks at night. It's a common activity for floors here to play during Welcome Week, and a group of us actually played "Laser Tag Capture the Flag" during training my sophomore year (that's what the picture is from - it's one of my favorite pictures too).

Manhunt/Infection
These are two versions of the same game that my friends and I would play pretty often during high school. We'd go out to the parks at night, and select one person to be "it". In manhunt, this person runs into the park, and hides, then the rest of us would try to find them, tackle them, and pin them to the ground. We soon replaced that with the more interesting game of infection though - all but one person would hide, and the one "it" person (the infected) would try to find the others, and tackle them. Once you were tackled, you also became "it", and you worked to bring down everybody else. The game would start off very slowly, but as soon as somebody got picked off, the game picked up pace, until it was a whole horde of people trying to take down the last survivor. Yes, we were weird. But it was always fun.

Monopoly
Monopoly is my FAVORITE board game ever. I love getting really into it, cutting deals, making decisions using probability of dice rolls, and so on. It basically sums up my math/econ interests. Oh, and the feeling you get from bankrupting another player? Awesome.

Call of Duty 4: Modern Warfare
Even though I play Rock Band more regularly, I'd say that Call of Duty 4 is my favorite video game right now. I can play for hours when I get into it, and the online multiplayer is really good. The levels are all extremely fun (with the exception of Bloc), and there are a lot of little things that just make it the best multiplayer shooter out right now. My favorite thing has to be the class system, because I love unlocking new guns & abilities, upgrading them, and combining them in the most effective ways. The single player campaign has a great story too though, and definitely shouldn't be overlooked. And I'm really excited that Modern Warfare 2 is coming out at the end of this year. The fact that this one has kept me entertained for almost a year and a half now bodes well for the quality of the next game too.

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Text Messages #7

From Ariel, regarding these posts:

Do it. It makes me feel like I have a purpose in life when I make your Wall of Fame.

From Caity, also regarding these posts:

Oh my goodness i'm so honored to be on your text message blog post

From Caity, regarding Harry Potter:

I'm reading HP3 and wizards think muggles are so dumb, but they don'e even [have] cell phones or anything! Muggles win that one.

From My Sister, who thinks very highly of herself:

yeah.. cuz im too smart for school.. so i go to disneyland and vegas or seaworld.. btw [friend] says hi.. shes too smart for school too

From Caity, regarding cars (and Harry Potter again):

Ahhh.. Maserati. The Firebolt of the muggle world..

From My Brother, regarding his Coast Guard visit:

Its sick dude. I got to sit in a helicopter and he like taught me how to fly. I didn't actually get to fly but he like talked me through controls and stuff. Pretty sweet. I cant wait to join

From Caity, who got inadvertantly caught up in our bowling adventures/madness:

I DON'T KNOW WHAT TO DO

From Aubrey, maintaining my low levels of faith in the general UCLA populace:

Yay! someone's riding around the hill on a bike iwht a ski mask and shooting people with a BB gun! fun saturday night for me! hehe

From Yong, in yet ANOTHER of his weird moods:

We can only know and come to care for one another by meeting fact to face arduously and by the willing loss of comfort. -Wendell Berry

From Aaron, regarding half of my heritage:

this just in! gov. schwarzenegger pushes debate on legalization of pot in california. looks like we might not need canada after all =)

From Aaron, further attacking that half of my heritage:

shut up and go eat some maple syrup, eh

The following has no context. It's just weird. Deal with it:

Ariel: "Bah humbug!"
Me: "Bah hamburger!"
Ariel: "Bah cheeseburger ...... ?"
Me: "Bah guacamole bacon $6 burger!"
Ariel: "You win."

From Ariel, regarding Spring Sing:

YONG JUST GOT KISSED BY JANICE DICKENSON

From Yong, regarding Spring Sing:

Omg. That wasn't suppose to happen

From Vicki, regarding Julie Andrews:

SHE HUGGED ME. and held both my hands. OMG.

From Caity, regarding Alex's excitement for seeing Julie Andrews:

Make sure she doesn't wet herself.

From Aaron, being a total G:

yes jer the whole club is looking at hurr!

From Yong, regarding his date with Janice:

Love her. She just gave me money

It's worth the coug

From Caity, the mad scientist:

Okay so i have a great idea. WHAT IF i break some glow sticks and put the glowy IN a bubble thing AND THEN blow bubbles?! Glow in the dark bubbles.

From Aubrey:

i love gay pride! ive seen several tight speedos wtih big weenies in them and there's a fat guy passing out twinkies! NOM

From Ariel, regarding bad comedy:

Oh boy, we are in for a treat

Already off to an awkward start

This is horrendous

They need to sit down immediately

From Lauren, also regarding the bad comedy:

That shit sucked

From my resident, regarding karaoke:

[Resident] is singing 'my heart will go on' pretty high pitched, i suggest you come back immediately

Thats enough for tonight. I'm way behind on these... Probably have one or two more post's worth of stuff! But those'll just have to wait.

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Rational or Irrational? (#2)

Last time, I wrote about how people would rather volunteer their time freely than do the same work for very low wages. It is an interesting result, because it shows that there are some psychological/social factors that can cause people to refuse money/gifts.

Results like this seem to cause problems in traditional economic theory, because they suggest that people do not act rationally, which is kind of a cornerstone assumption. However, as I alluded to before, I still think that people were exhibiting a rational response. I want to look at 'The Ultimatum Game' now, and further my argument that results like this do not refute the assumption that people act rationally.

The Ultimatum Game is a very simple experiment, involving two players (though you could feasibly extend and modify it for more people). Player A is asked to propose a way to split a pile of money between the two players, and Player B then gets to accept or reject the offer.

If Player B accepts, then both get the money as suggested by Player A. But if Player B rejects the offer, neither player gets any money.

Now, in theory, if the game was played between two rational people, then Player A would offer as little money as possible to Player B. Player B would then accept, because no rational person would reject what is essentially free money.

Of course, that's not how the game is played out. Studies show (according to Wikipedia, and other sources I've seen) that Player B will generally only accept the offer if they're getting at least 20-30% of the sum. Another interesting observation is that as the sum of money goes up, the offers by Player A become more and more fair (that is, closer to a 50-50 split).

So the question that arises is, why do people act in this way? After all, it would make sense to accept a 15% share, because the alternative is getting nothing. And also, if we're talking about a $40,000 pot, then you'd expect Player B to be MORE likely to accept a low offer (15% of this would be a $6000 payout), so you'd then expect Player A to make a LESS fair offer.

Now, I don't have exact answers, because I've never conducted research on this topic. I have ideas though (I didn't come up with them, but I've seen them elsewhere and agree):

First, people reject highly uneven offers because they feel it's unfair, or that they're being taken advantage of. What it essentially comes down to is that these low offers don't pay enough for Player B to accept the inequity. Most people would accept a 49-51 split, because their payoff is much greater than the inequity. This is interesting too, because it implies that people can be paid to ignore inequity/injustice. And I definitely think this is true... everybody has a price.

But if this is the case, why would you offer a more even split when the stakes rise? After all, with higher stakes, you can hit the other person's 'buy off' price to accept inequity with a lower percentage offer (if that makes any sense). But in this case, you need to think from Player A's perspective. If we're talking about $40,000, then I (as Player A) would definitely want to make sure I get my cut. So I'd offer a much fairer split, to ensure that I get my money.

After all, I'd rather take $20,000 for sure, rather than risk them rejecting an offer that could give me $30,000. Player A is essentially buying insurance by making a more equal offer.

But now, another question arises: If these are rational decisions (and I'm arguing that they are), AND if the 'expected' results are ALSO rational (which I also believe they are), then don't we have some kind of conflict? And what does this mean for economic theory?

I say that we don't have any conflict here, and that this only serves to reinforce the economic theory of rational people making rational decisions. See, I was a little sloppy earlier in explaining the rational consumer aspect of economic theory. What it actual suggests is that all consumers act rationally to maximize their own UTILITY, not their monetary wealth. Utility is essentially happiness - I'll accept any offer that makes me happier (be it due to more money, or because I feel better about myself, or whatever). This is why people volunteer their time for no compensation - they're still getting some kind of benefit (psychological, most likely). They're increasing their utility.

So when we look back at the game, if Player B is going to feel bummed about the offer, they won't accept it, even if it means giving up money. And Player A will offer to take less money, if it means that they don't lose out.

See? Rational. Now, one last question - do you agree?

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Rational or Irrational?

There was study I came across online once (that I sadly can't locate now), that had an interesting result. And while I can't provide a link to it, I can explain the gist of it:

Essentially, the study tracked people's willingness to do work in various situations. They started by figuring out how many of their subjects would be willing to volunteer for a few hours (at a soup kitchen or something), with no form of compensation. Pure community service. They then offered to compensate these workers with a small amount of money (say, $2 total).

Perhaps surprisingly, fewer people wanted to work under these conditions. More people were willing to work for free than for $2. Now, the question is: is this rational?

From a purely economic standpoint, the answer is clearly no. The more that you are offered for your work, the more you should want to do it (at least, to a certain extent - if you're making $1000/hour, you'll probably be fine working only a handful of hours/week). So in that regard, this is highly irrational behavior.

I disagree though. I think this is perfectly rational behavior, and it's exactly how I would've reacted too. I think that psychologically, there is a difference between volunteer work and paid work.

When I agree to volunteer to do something, I'm doing so with no expectation of compensation. I have agreed to 'give away' my hours of labor for whatever personal satisfaction I get from volunteering. But as soon as you go to put a price on it, my mindset changes. You're now hiring me, and I don't work for $2/hour.

And the thing is, it's kind of insulting. I know the money is a kind of 'reward' or a 'token of thanks', but you're still putting a value on it. And in this case, the value is too low.

I'm sure you can get into the social/psychological aspect of this much more, but I find the results interesting, because it sheds light on the idea of using gifts to show your gratitude. And in particular, it shows that if you go about it the wrong way, you can breed resentment.

Case in point: UCLA's Office of Residential Life. At the end of the year, all members get a small gift as a 'token of gratitude' for all the hard work they've put in (and it's a LOT of work). But the problem is, this item is usually something fairly worthless - a padfolio, a ceramic 'bank' that looks like a Lego, a poor-quality tool kit, etc.

And what that says to the employees is, "we value your hard work and your many contributions at a level equal to the value of this [item]". And with something so worthless, it breeds a feeling of unappreciation - the exact OPPOSITE of the intent.

Anyways, I think it's interesting, and has an important real-world consequence that people should be aware of. What do you think though... is this a rational way of looking at things?

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