US Students' Payoff-Maximizing Offer and Most Frequent Offer
Calculations of expected payoffs, based on student Responder behavior, indicate that an offer of 30% maximizes a student Proposer's earnings. This calculated optimum is strongly correlated with observed behavior, as 30% was also the most frequent offer made by students in the experiment.
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CORE Econ
Introduction to Microeconomics Course
Ch.4 Strategic interactions and social dilemmas - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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US Students' Payoff-Maximizing Offer and Most Frequent Offer
Strategic Rationale for US Students' Low Offers
In an economic experiment, a 'Proposer' is given $100 and must offer a portion of it to a 'Responder'. If the Responder accepts the offer, the money is split as proposed. If the Responder rejects the offer, both individuals receive nothing. The experiment is conducted with two distinct populations, Group A and Group B. The results show two key patterns:
- Proposers from Group A consistently make more generous offers (e.g., $40-$50) than Proposers from Group B (who often offer $10-$30).
- Responders from Group A are very likely to reject any offer below $40, while Responders from Group B frequently accept offers as low as $10.
Given this information, what is the most likely reason that a purely self-interested Proposer from Group A would make a high offer?
In an economic game where one person (the 'Proposer') offers a share of a sum of money to another (the 'Responder'), the observation that Proposers from a particular group consistently make high offers is, by itself, sufficient proof that this group values fairness more than a group whose Proposers make low offers.
Interpreting Strategic Behavior in an Economic Game
Strategic Negotiation Analysis
In an economic experiment, a 'Proposer' offers a share of a sum of money to a 'Responder'. If the offer is rejected, neither person gets anything. The experiment was run with two separate populations: Population 1 and Population 2. Match each Proposer's typical strategy to the most likely underlying reason for that strategy, based on the behavior of Responders in their respective populations.
Evaluating Conclusions from Economic Behavior
In an economic game where a 'Proposer' offers a share of a sum of money to a 'Responder', a Proposer who is motivated solely by maximizing their own financial gain will calculate their offer by considering the potential payout of each possible split, weighted by the probability that the Responder will ____ that offer.
A 'Proposer' in an economic game is deciding what portion of a sum of money to offer a 'Responder'. The Proposer's only goal is to maximize their own financial gain. They know that Responders in their community are very likely to reject low offers, meaning both parties would get nothing. Arrange the following steps in the logical order that this purely self-interested Proposer would follow to decide on their offer.
Analyzing Proposer Behavior in an Economic Game
In an economic game, a 'Proposer' has $100 to split with a 'Responder'. If the Responder rejects the offer, both get $0. The Proposer is purely self-interested, aiming only to maximize their own financial gain. The Proposer is considering two possible offers based on their knowledge of how Responders in their community typically behave:
- Offer A: Offer $20 to the Responder. The Proposer anticipates this has a 50% chance of being rejected.
- Offer B: Offer $40 to the Responder. The Proposer anticipates this has a 10% chance of being rejected.
Which offer should the Proposer make, and what is the correct reasoning?
Figure 4.18b: Actual Offers and Expected Rejection Proportions
Strategic Risk Aversion as an Explanation for Kenyan Farmers' High Offers
Figure 4.18a: Distribution of Offers Made by Proposers
Learn After
Interpreting Housing Price Indices
Calculating Expected Payoff in an Ultimatum Game
In an economic experiment, student 'Proposers' decided how to split a sum of money with a 'Responder'. Calculations based on how Responders typically reacted showed that a Proposer's expected earnings would be highest if they offered 30% of the sum. When observing the actual offers made by Proposers, the most common offer was also 30%. What is the most logical interpretation of this alignment?
Analyzing Proposer Behavior in an Economic Game
Analyzing Proposer Behavior in an Economic Game
In an economic experiment where 'Proposers' offer a split of a sum of money to 'Responders', it was found that the offer that mathematically maximized a Proposer's expected earnings was 30%. The most frequently observed offer from Proposers was also 30%. This outcome demonstrates that the Proposers were primarily motivated by a desire for a fair and equitable distribution.
Analyzing Strategic Behavior in a Bargaining Game
Evaluating Motivations in Economic Experiments
In an economic experiment involving a bargaining game, researchers calculated that the offer that would maximize a 'Proposer's' expected earnings, considering the likely reactions of 'Responders', was 30% of the total sum. Observation of the actual game showed that the most common offer made by Proposers was also 30%. This strong correlation suggests that the Proposers' behavior was primarily driven by ____.
In a bargaining experiment, researchers determined that the offer maximizing a 'Proposer's' expected monetary payoff was 30% of the total sum, considering the probability of 'Responders' rejecting different offers. The experiment's results showed that the most common offer made by Proposers was indeed 30%. The researchers concluded that Proposers' behavior was primarily driven by strategic self-interest. Which of the following hypothetical findings would most effectively challenge this conclusion?
In an economic experiment, student 'Proposers' decided how to split a sum of money with a 'Responder'. Calculations based on how Responders typically reacted showed that a Proposer's expected earnings would be highest if they offered 30% of the sum. When observing the actual offers made by Proposers, the most common offer was also 30%. What is the most logical interpretation of this alignment?