Automation, broadly referring to the adoption of machines and computers in the production process has become increasingly more popular across many sectors and countries. For example, the market for industrial robots has experienced a dramatic expansion in the last couple of decades. At the same time, the prices of labour and robots have been changing. The case of the US manufacturing sector in the last few decades is shown in Figure 2. Now, consider Bruno, who owns a small manufacturing firm and produces windscreens for automobiles. Currently Bruno uses two robots and ten workers including Angela in his production. Discuss

Figure 3: Fraction of offers rejected in the ultimatum game, according to offer size and the number of Responders 100 Fraction of offers rejected (%) One Responder Two Responders 75 50 25 0 0 35 40 45 50 Fraction of the pie offered by the Proposer to the Responder(s) (%)Figure 2: Robot prices and 220 Labor costs labour compensation in 200 180 manufacturing in the US 160 (1990=100) 140 120 100 Source: Tilley, Jonathan, "Automation, 80 Robotics, and the Factory of the Future", 60 September 7, 2017, Mckinsey & Company. 40 Robot prices 1990 1995 2000 2005 2010