I don’t often time republish stuff but this was too good, and I wanted my regular readers to have a look at it!
Click the link for the whole paper, it is worth it.
I know, I know: everybody is sick of hearing about those AIG bonuses. But bear with me for one more blog post, because I think the swell of populist anger can actually illuminate something interesting about the human response to inequality.
Consider the ultimatum game, that simple economic task where one person (the proposer) is given ten dollars and told to share it with another person (the responder). The proposer can divide the money however they like, but if the responder rejects the offer then both players end up with nothing.