Maggie's Farm

I agree. I saw this same video on Ann Althouse's blog the other day. Before I knew the end result I put myself in the position of the guy on the left (Abraham) and decided to go firmly with STEAL. That produces a stalemate, forcing the guy on the right (Nick), who insisted he was going to choose STEAL, to make a decision.

What can Nick do? If he goes through with his declaration to choose STEAL, he loses the money. I lose the money but I get the satisfaction of having denied Nick the money, knowing that Nick gets no satisfaction.

On the other hand, if Nick chooses SPLIT instead of following through on his declaration to choose STEAL, and I stick with my declared intention to choose STEAL, I get the money. I do NOT share the money with Nick, so he gets nothing and I---once again---have the satisfaction of having put Nick in his place.

If I were Abraham, I would counter Nick, telling him I'd be choosing STEAL, and then I'd follow through doing exactly what I said. I win in either case, either the pure satisfaction or else the money + satisfaction. By being the first to declare he will choose STEAL, Nick gets no money whatever I do. He is the loser.

This may not be the conventional result game theorists predict, but it DEFINITELY is what I would do.

"This may not be the conventional result game theorists predict,.."

Having second thoughts. After a bit of reflection, contrary to what I posted yesterday, the rational choice for either player is, in fact, to choose STEAL, which is what I would have chosen had I been Abraham. STEAL is the only one of the two options that offers a player the chance to take all of the winnings. For each player, therefore, STEAL yields a higher average expected return than SPLIT.