Nothing Ever Happens

I think you will all appreciate this great article from the Economist on the questioning of the rational customer behaviour as the pillar of the market economy.

Men with a lot of testosterone make curious economic choices

PSYCHOLOGISTS have known for a long time that economists are wrong. Most economists—at least, those of the classical persuasion—believe that any financial gain, however small, is worth having. But psychologists know this is not true. They know because of the ultimatum game, the outcome of which is often the rejection of free money.

In this game, one player divides a pot of money between himself and another. The other then chooses whether to accept the offer. If he rejects it, neither player benefits. And despite the instincts of classical economics, a stingy offer (one that is less than about a quarter of the total) is, indeed, usually rejected. The question is, why?

Read the whole story.