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Brexit, Trump and the Ultimatum Game

Source: https://medium.com/@jamesallworth/brexit-trump-and-the-ultimatum-game-2237e17de71c

Even though we studied the Ultimatum game in our class and how “powerful” nodes can leverage their other connections to exploit the “less powerful” nodes, a critical factor that is incredibly hard to insert into our calculations is the human perception of fairness and justice. This perception is explored by Allworth in “Brexit, Trump and the Ultimatum Game” as a potential explanation for phenomenons such as the vote for Brexit and the election for Trump.

In this article, Allworth explains that in a Ultimatum-game deal where a player gets the short the end of the stick, rather than going through with the deal as one would rationally do, a player would often outright reject the deal due to the perceived unfairness of the deal. In both the UK and the United States, the working middle class often see themselves as these players who are exploited by the “1%” elite in these unfair deals. As a result, Brexit and Trump’s election is their way of voicing out their rejection of the deal. Through this analysis, Allworth raises the important point that no matter how much benefit is reaped by capitalism, “those folks being screwed won’t care how much the pie is being grown if they feel they’re not getting a fair slice… They’ll throw the whole thing out”.

This issue connects directly to our study of the Ultimatum Game in class. Going even deeper, we can see that the powerful “1%” are truly the ones with the most connections to leverage; in the real-world, these people are the ones with immense amounts of resource and therefore have the opportunities to network with others of the same power and status. On the other hand, this disparity in resources means the working middle class do not have as many choices and opportunities; in our Ultimatum Game graph, they are closer to the fringe of the network with less connections to leverage. As a result, the powerful “nodes” can constantly leverage their network and exploit the less powerful “nodes”, maintaining or even increasing the inequality of resources available to each “node” throughout the graph. As a result, through Brexit and Trump’s election, these less powerful “nodes” are crying out against the unfair deals they have suffered, preferring that their “1%” counterparts all sink with no “deal” made.

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