Consider an ultimatum game where the Proposer offers a proportion of $100 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. Figure 4.12 shows the results of a study that compares the responses of US university students and Kenyan farmers. From this information, we can conclude that:
A
Kenyans are more likely to reject low offers than Americans.
B
Just over 50% of Kenyan farmers rejected the offer of the Proposer keeping 30%.
C
Both groups of Responders are indifferent between accepting and rejecting an offer of receiving nothing.
D
Kenyan farmers place higher importance on fairness than US students.
Ans. D. Kenyan farmers place higher importance on fairness than US students.
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Consider an ultimatum game where the Proposer offers a proportion of $100 to the Responder, who...
Consider an ultimatum game, in which the Proposer gets $100 and offers a portion of it to the Responder, who can either accept or reject. If the Responder accepts, both keep the agreed share, while if he rejects, then both receive nothing. Which of the following statements is correct? a)The Responder's payoff is greater when they reject $20 than when they accept $20? b)Economic experiments show the responders are motivated entirely by self-interest c)It is never in the proposer's self-interest...
Amy and Beth have to bargain about how to divide R250. Amy moves first, making an offer of some portion of the R250 to Beth. Beth then chooses to accept or reject the offered amount. If Beth accepts, the money is divided according to the proposal. If Beth rejects the offer, the amount is reduced by R50, so that there is R200 left, and then Beth gets a turn, making an offer to Amy. If Beth’s offer is accepted, the...