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There's a problem of asymmetric information here: if the second student knows the rules (which stipulate that the first must give him money), he will not as easily reason that one dollar is all the same better than no dollar. He will hold out for a 50-50 split.

The experiment seems based on the condition that the second student doesn't know the first is under obligation. The kind of asymmetric information that is encountered everywhere, every day, in real life, and is one of the reasons why reality is much more complicated than hocus-pocus economic theory.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jul 18th, 2007 at 01:34:53 AM EST
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