You don't really need to understand game theory to get this application of it.
Basically, two random individuals are put in a situation with a few ground rules (one being that this is the only time these two people will play this game together)
Person A is then allowed to offer person B a portion of $10; if person B accepts, person A gets to keep the remainder of the $10; if person B rejects the offered money, neither of them get any of the money.
The article is saying that people tend to reject low offers (like $1) since obviously, they want at least $5 of the money, and see less than that as unfair.
Slashdot Mirror
You don't really need to understand game theory to get this application of it.
Basically, two random individuals are put in a situation with a few ground rules (one being that this is the only time these two people will play this game together)
Person A is then allowed to offer person B a portion of $10; if person B accepts, person A gets to keep the remainder of the $10; if person B rejects the offered money, neither of them get any of the money.
The article is saying that people tend to reject low offers (like $1) since obviously, they want at least $5 of the money, and see less than that as unfair.