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Do you consider yourself a rational thinking person? Most people do, but there are factors that play into decision making that distort rationality in an the equation. Economics theories are based on entities behaving rationally, but in practice people often do not.
The Experiment
Take the classic ultimatum example (yes, I have been reading The Wisdom of Crowds again). In this experiment, two people are placed in a situation where $10 is at stake.
- Person A is given the ability to divide up the money.
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