Choice Irrationalities

There was a great Analysis programme on radio 4 last night: The Economy on the Couch which was about behavioural economics, neuroeconomics (whatever that is) and ways in which we fail to act like the rational agents that standard economic theory supposes us to be

One irrationality- a human frailty for fairness- is revealed by a thing called the Ultimatum Game. The Ultimatum Game works like this. I am offered some money, say £100, on the condition that I share it with you. I get to decide the split, and you get to say if you accept it or not. If you accept, we get the money in the proportions I determined, if you reject my split then neither of us gets anything. So what would you do if I offered £1 to you, leaving me with the other ninety-nine?

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