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Want $3.01?

Market psychologists did a study on one's sense of fairness. Suppose you are given $10 with the requirement that you offer some of it (e.g. $A) to someone else. If that person accepts your offer, you both get to keep your portions of the money (e.g. $A and $10-$A). What do you think happened?

According to Dan Ariely, author of Predictably Irrational, "classical economics predicts the second person would accept any offer--it's free money, after all." Yet, in the experiment, offers of less than $3 were continually rejected, meaning neither person received any money.

Ariely claims "people routinely refuse offers they think aren't fair, even if it hurts them." He relates this to Craiglist sellers who reject counteroffers because they would prefer to keep an unwanted, unused item than sell it for less than its perceived value.

Somehow, this must relate to Rubric grading and students' acceptance of "earned" scores for their "perceived success" on exams, etc.

Source: Wired, August 2009