A four-year-old girl sees three biscuits divided between a stuffed crocodile and a teddy bear.The crocodile gets two; the bear one."Is that fair?" asks the experimenter.The girl judges that it is not."How about now?" asks the experimenter, breaking the bear's single biscuit in half.The girl cheers up: "Oh yes, now it's fair.They both have two." Strangely, children feel very strongly about fairness, even when they hardly understand it. Adults care about fairness too --- but how much? One way to find out is by using the ultimatum   game, created by economist Werner Guth.Jack is given a pile of money and proposes how it should be divided with Jill.Jill can accept Jack's "ultimatum", otherwise the deal is off, and neither gets anything. Suppose Jack and Jill don't care about fairness, just about accumulating cash.Then Jack can offer Jill as little as he likes and Jill will still accept.After all, a little money is more than no money.But imagine, instead, that Jack and Jill both care only about fairness and that the fairest outcome is equality.Then Jack would offer Jill half the money; and Jill wouldn't accept otherwise. What happens when we ask people to play this game for real? It turns out that people value fairness a lot.Anyone offered less than 20-30% of the money is likely to reject it.Receiving an unfair offers makes us feel sick.Happily, most offers are pretty equitable; indeed, by far the most common is a 50-50 split. But children, and adults, also care about a very different sort of (un)fairness, namely cheating.Think how many games of snakes and ladders have ended in arguments when one child "accidentally" miscounts her moves and another child objects.But this sense of fairness isn't about equality of outcome: games inevitably have winners and losers.Here, fairness is about playing by the rules. Both fairness-as-equality and fairness-as-no-cheating matter.Which is more important: equality or no-cheating? I think the answer is neither.The national lottery , like other lotteries, certainly doesn't make the world more equal: a few people get rich and most people get nothing.Nevertheless, we hope, it is fair --- but what does this mean? The fairness-as-no-cheating viewpoint has a ready answer: a lottery is fair if it is conducted according to the "rules".But which rules? None of us has the slightest idea, I suspect.Suppose that buried in the small print at lottery HQ is a rule that forbids people with a particular surname (let's say, Moriarty).So a Ms Moriarty could buy a ticket each week for years without any chance of success. How would she react if she found out? Surely with anger: how dare the organisers let her play, week after week, without mentioning that she couldn't possibly win! She'd reasonably feel unfairly treated because  _ . To protest  against unfairness, then, is to make an accusation of bad faith.From this viewpoint, an equal split between the crocodile and the bear seems fair because (normally, at least), it is the only split they would both agree to.But were the girl to learn that the crocodile doesn't like biscuits or that the bear isn't hungry, I suspect she'd think it perfectly fair for one toy to take the whole.Inequality of biscuits (or anything else) isn't necessarily unfair, if both parties are happy.And the unfairness of cheating comes from the same source: we'd never accept that someone else can unilaterally  violate agreements that we have all signed up to. So perhaps the four-year-old's intuitions  about fairness is the beginnings of an understanding of negotiation.With a sense of fairness, people will have to make us acceptable offers (or we'll reject their ultimatums) and stick by the (reasonable) rules, or we'll be on the warpath.So a sense of fairness is crucial to effective negotiation; and negotiation, over toys, treats etc, is part of life. It can be inferred that in the ultimatum game,   _  .
Jack keeps back all the money Jill can negotiate fair division with Jack Jack has the final say in the division of money Jill has no choice but to accept any amount of money