The ultimatum game is a simple two-player experiment: one player, the proposer, is given a sum of money and decides how to split it between themselves and the second player, the responder. The responder then either accepts the proposed split, in which case both players keep their share, or rejects it, in which case neither player gets anything at all. Standard rational-choice economic theory makes a clean prediction here: since something is always better than nothing, a purely self-interested responder should accept any offer above zero, however small, and a proposer who anticipates this should therefore offer the responder as little as possible. Real people playing the game consistently don't behave this way.
People reject offers that leave them better off than before
Across many repeated experiments, run in a wide range of cultures and with a wide range of stakes, responders reliably reject offers they perceive as too unequal — commonly, offers that give the responder much less than roughly a quarter to a third of the total — even though rejecting always leaves the responder strictly worse off in that moment than simply accepting the small amount on offer would have. This isn't a rare fluke result or a one-off artifact of a badly designed early study; it's one of the most robustly replicated findings in experimental economics, and it holds up even when the amounts of real money involved are large enough that the rejected sum would genuinely matter to the responder's actual finances.
What the rejection is actually buying the responder
Behavioural economists generally interpret this pattern as evidence that people don't only care about their own final payoff in isolation, but also about fairness and reciprocity as things worth something in their own right — a responder rejecting a stingy offer is, in effect, paying a real cost, the money they'd otherwise have received, to punish a proposer perceived as behaving unfairly. This directly contradicts the narrower assumption, standard in much of classical economic theory, that people are purely self-interested and care only about maximising their own material payoff, and it's part of why behavioural economics developed the broader concept of social preferences — treating fairness, reciprocity and even a taste for punishing perceived unfairness as real, measurable factors that shape economic decisions, not irrational noise sitting on top of an otherwise purely self-interested rational actor.
What we're still unsure about
The basic result — that responders reliably reject low offers well above what pure self-interest predicts — is one of the most extensively replicated findings in experimental economics, holding up across many different cultures, stakes, and experimental variations. What remains more genuinely debated is exactly what's driving the rejection at a deeper psychological level: whether it's best explained as a taste for punishing unfairness specifically, a more general aversion to unequal outcomes regardless of who caused them, concern for reputation even in a supposedly anonymous one-shot game, or some combination that varies between individuals and cultures — researchers have proposed several overlapping explanations, and no single account has fully displaced the others as the settled, complete explanation for why the rejection happens.
This sits inside Social Preferences & Fairness, one of seven topics in Behavioral Economics, one of five domains in Economics, one of seventeen subjects the app can quiz you on.