Dictator Game
The dictator game is an experimental model where one player, the Proposer, has absolute authority to divide a resource. The other player, the Responder, has no strategic role and must accept whatever division is offered. Under these rules, the Proposer holds all the bargaining power, and the Responder has none.
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Introduction to Microeconomics Course
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CORE Econ
Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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Consider two distinct one-time bargaining situations involving a Proposer and a Responder who must agree on how to split $100.
Situation 1: The Proposer makes a take-it-or-leave-it offer. If the Responder accepts, they split the money as proposed. If the Responder rejects, both get nothing.
Situation 2: The Proposer dictates the split, and the Responder automatically receives their share with no ability to reject the offer.
How does the change in rules from Situation 1 to Situation 2 affect the relative bargaining power of the Proposer and the likely outcome?
Impact of Competition on Bargaining Outcomes
Consider three different one-time bargaining scenarios over a sum of $100. Arrange these scenarios in order from the one that gives the Proposer the MOST bargaining power to the one that gives the Proposer the LEAST bargaining power.
Analyzing the Impact of a Modified Rejection Payoff
Evaluating Rule Structures for Equitable Bargaining
In a strategic interaction where one person (the Proposer) offers to split a sum of money with another person (the Responder), match each modification to the rules with its most likely effect on the balance of bargaining power.
True or False: Consider a one-time bargaining situation where a Proposer offers a split of $100 to a Responder. If the rule is changed from 'a rejection means both players get $0' to 'a rejection means the Responder gets $10 and the Proposer gets $0', this change in rules decreases the Responder's bargaining power.
In a one-time bargaining interaction, a Proposer offers to split $100 with a single Responder. If the Responder rejects the offer, both individuals receive nothing. If the rules are changed so that the Proposer makes an offer to two Responders simultaneously, and the split is finalized with the first Responder to accept, the introduction of this competition is expected to cause the average offer amount accepted by a Responder to ________.
Analyzing the Impact of an Outside Option on Bargaining Power
A research institute is studying how different rule structures affect negotiation outcomes. They set up four different scenarios for a Proposer to split a $100 prize with a Responder. In which of the following scenarios does the Proposer have the most structural power, making a highly unequal split (e.g., the Proposer keeping almost everything) the most probable outcome?
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Learn After
Dictator Game with a $100 Pie
An experiment is conducted where one person, the 'Allocator', is given $100. They have the sole power to decide how to split this money between themselves and a second person, the 'Recipient'. The Recipient is informed of the split but cannot reject the offer or influence the outcome in any way. The Allocator knows all of these rules. Which of the following statements provides the most accurate analysis of the Allocator's decision-making process in this scenario?
Bonus Pool Allocation
Analyzing the Rules of the Dictator Game
In an experimental setup where a 'Proposer' is given a sum of money to divide with a 'Responder', the Responder's only strategic option is to accept the proposed division, as rejecting the offer would result in both participants receiving nothing.
In an experiment, Participant A is given $50 and instructed to decide how much of it to give to Participant B. Participant B is aware of the total amount and the decision made by Participant A, but has no ability to influence the outcome or reject the proposed division. Match the elements of this scenario to their correct conceptual description.
Evaluating an Experimental Design for Fairness
In an experimental setup where a 'Proposer' is given a sum of money and has full authority to decide how to split it with a 'Responder', the Responder's inability to reject the offer is a crucial rule. This rule is specifically designed to eliminate the Responder's ______ from the strategic interaction.
You are observing an economic experiment designed to give one participant absolute power over an allocation. Arrange the following events in the correct chronological order as they would occur in this specific type of game.
In an economic experiment, a 'Proposer' is given a sum of money and has complete authority to decide how to divide it with a 'Responder'. The Responder is informed of the division but has no ability to reject the offer or influence the outcome. What is the primary analytical purpose of designing the experiment with a completely passive Responder who cannot reject the offer?
In an economic experiment, one participant (the 'Proposer') is given a sum of money and has complete, unilateral power to decide how much to share with a second, anonymous participant (the 'Responder'). The Responder has no ability to reject the offer. A purely self-interested Proposer, aiming only to maximize their own payoff, would logically offer $0. However, in numerous replications of this experiment, a significant number of Proposers choose to give a non-zero amount. What is the most robust conclusion that can be drawn from this common experimental finding?