Consider an ultimatum game where the Proposer has $100 and offers a proportion of it to the Responder, who can either accept or reject the offer. If the Responder accepts, both the Proposer and the Responder keep the agreed share, while if the Responder rejects, then both receive nothing. Which of the following statements is correct? Responders often reject offers greater than $0. If a large group of participants play the game, then the average share across pairs will always be 50:50. Based on experimental evidence, many Responders will accept an offer of $0. The Responder should not accept any offer less than $60.

Consider an ultimatum game where the Proposer has $100 and offers a proportion of it to the Responder, who can either accept or reject the offer. If the Responder accepts, both the Proposer and the Responder keep the agreed share, while if the Responder rejects, then both receive nothing. Which of the following statements is correct? Responders often reject offers greater than $0. If a large group of participants play the game, then the average share across pairs will always be 50:50. Based on experimental evidence, many Responders will accept an offer of $0. The Responder should not accept any offer less than $60.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 15.4IP

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