Predicting Impacts of Income Transparency

In an economic experiment, a 'Proposer' offers to split a sum of money with a 'Responder'. The Responder can either accept the split, or reject it, in which case neither person gets anything. Data shows that Proposers frequently offer a 40% share, an amount that also happens to maximize their own expected financial return by balancing the size of their retained share against the risk of rejection. Beyond this strategic financial calculation, what is another primary motivation that could explain why a Proposer would make such a seemingly generous offer?

In an economic experiment where one person (the Proposer) offers a split of a sum of money to another (the Responder), the Proposer's decision to offer a substantial share can be fully explained as a strategic calculation to maximize their own expected financial gain.

Dual Motivations in Economic Offers

Dual Motivations in Economic Offers

Deconstructing an Economic Offer

In an economic experiment where one person (the 'Proposer') decides how to split a sum of money with another, different motivations can influence their offer. Match each potential motivation with the internal thought process that best represents it.

Analyzing Proposer Motivations in an Economic Game

In an economic experiment, a 'Proposer' must offer a portion of $100 to a 'Responder'. If the Responder accepts, they both keep their shares; if the Responder rejects, neither gets anything. The Proposer calculates that offering $40 will maximize their own expected financial return, considering the probabilities of rejection at different offer levels. However, the Proposer ultimately decides to offer $50. Which of the following best explains this decision, assuming the Proposer is not making a calculation error?

In an economic game, a 'Proposer' offers a split of a sum of money to a 'Responder'. The most frequent offer is 40%, which has been calculated to be the split that maximizes the Proposer's own expected financial return by optimally balancing the amount kept against the risk of the Responder rejecting the offer. An economist hypothesizes that this 40% offer might be motivated not only by this strategic calculation but also by the Proposer's intrinsic sense of fairness toward the Responder. Which of the following experimental changes would best help to determine the relative importance of these two motivations?