Thursday, July 5, 2007

Ultimatum games: The Testosterone Monologues

This week's The Economist is reporting on Burnham's study relating the ultimatum game and testosterone levels:

Dr Burnham's research budget ran to a bunch of $40 games. When there are many rounds in the ultimatum game, players learn to split the money more or less equally. But Dr Burnham was interested in a game of only one round. In this game, which the players knew in advance was final and could thus not affect future outcomes, proposers could choose only between offering the other player $25 (ie, more than half the total) or $5. Responders could accept or reject the offer as usual. Those results recorded, Dr Burnham took saliva samples from all the students and compared the testosterone levels assessed from those samples with decisions made in the one-round game.

As he describes in the Proceedings of the Royal Society, the responders who rejected a low final offer had an average testosterone level more than 50% higher than the average of those who accepted. Five of the seven men with the highest testosterone levels in the study rejected a $5 ultimate offer but only one of the 19 others made the same decision.

What Dr Burnham's result supports is a much deeper rejection of the tenets of classical economics than one based on a slight mis-evolution of negotiating skills. It backs the idea that what people really strive for is relative rather than absolute prosperity. They would rather accept less themselves than see a rival get ahead. That is likely to be particularly true in individuals with high testosterone levels, since that hormone is correlated with social dominance in many species.

Here lies a major point that connects FARG architectures (active symbols), economists's misperceptions (throwing the baby with the bathwater--or, more technically, failing to perceive that other people's perception of a model may go way beyond the model), linguists (connotations), and artificial intelliegence researchers (in the Eliza effect). Here's hoping that Anne's work will be a significant step in this arena.