Farmers vs Students

4.11 of The Economy 1.0 & The Economy #3

What does this graph showcase about fairness?

-Kenyan farmers are very unwilling to take on low offers, because they are seen as unfair, but American students much more willing to do so.

-Suggests the important, yet again, of culture in economic negotiations on how rent is divided.

What does this graph showcase about generosity?

-Generosity must include how one decides how much to give to another person. Therefore, the farmers do shine in their generosity by concentrating their offers on a 60-40 split.

-Students struggle here because even though none of them would accept a 0% offer, 20% of students would make it an offer regardless.

If a Kenyan Farmer only cared about themself, what is the best they could do?

-They’d focus on comparing the expected payoff on the offers they would make. The expected payoff can be formulated as:

% of the offer being successful x % of the pie for proposer

-The expected offer of offering 40% and 30% can be seen as:

58 > 36

Can these experiments between Kenyan Farmers and American Students say something between the two populations?

-Many of the farmers and students offered a payoff that maximised their expected payoff, and Kenyan Farmers really did not like low offers

-Is that between Kenyans or Americans? Farmers vs Students? Social norms, occupation, politics, regulation…

-This experiment can not answer that question. But that was never its original intention