Playing the Meta-game

24 Technologos 25 December 2009 10:06AM

In honor of today's Schelling-pointmas, a true Schelling-inspired story from a class I was in at a law school I did not attend:

As always, the class was dead silent as we walked to the front of the room.  The professor only described the game after the participants had volunteered and been chosen; as a result, we rarely were familiar with the games we were playing, which the professor preferred because his money was on the line.

Both of us were assigned different groups of seven partners in the class. I was given seven slips of paper and my opponent was given six.  Our goal was to make deals with our partners about how to divide a dollar, one per partner, and then write the deal down on a slip of paper.  Whoever had a greater total take from the deals won $20.  All negotiations were public.

The professor left the room, giving us three minutes to negotiate.  The class exploded.

And then I hit a wall.  Everybody with whom I was negotiating knew the rules, and they knew that I cared a hell of a lot more about the results of the negotiation than they did.  I was getting offers on the order of $.20 and less--results straight from the theory of the ultimatum game--and no amount of begging or threatening was changing that.

continue reading »