Influence of Social Preferences on Responder Behavior in the Ultimatum Game
In ultimatum game experiments, the behavior of Responders often deviates from the predictions for a purely self-interested individual, who would accept any positive offer. The observed tendency to reject low but positive offers, as seen with groups like Kenyan farmers and US students, indicates that decisions are also shaped by social preferences. These preferences can include inequality aversion (a dislike of unfair outcomes), reciprocity (a desire to punish unkind behavior), and a commitment to upholding social norms of fairness.
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Introduction to Microeconomics Course
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Influence of Social Preferences on Responder Behavior in the Ultimatum Game
Two individuals, a Proposer and a Responder, are part of a one-time economic interaction to divide a sum of $10. The Proposer offers a split, and the Responder can either accept it (they both get the proposed amounts) or reject it (they both get $0). If the Responder is assumed to be purely self-interested, meaning their only goal is to maximize their own financial gain, what will they do if the Proposer offers them $0.01?
Responder Behavior Under Competition vs. Self-Interest
Responder's Logic in a One-Shot Division Game
Analyzing Responder Behavior
In a one-shot interaction to divide a sum of money, a purely self-interested Responder should reject an offer they perceive as 'unfair' (for example, receiving only 1% of the total sum) to signal that such offers are unacceptable.
In a one-time interaction, a Proposer offers a Responder a share of $100. If the Responder accepts, they both get the proposed amounts. If the Responder rejects, they both get $0. Four different Responders are each offered $5. Which of the following Responders is acting in a way that is perfectly consistent with a model of pure self-interest (i.e., their only goal is to maximize their own monetary gain)?
In a one-time interaction, two individuals must agree on how to split $20. One person (the Proposer) makes an offer, and the other (the Responder) can either accept or reject it. If the offer is accepted, the money is split as proposed. If it is rejected, both individuals receive $0. The Proposer offers the Responder $0. Assuming the Responder's sole motivation is to maximize their own financial payoff, what is their optimal action?
In a one-time economic interaction, a 'Proposer' is given $10 and must offer a portion of it to a 'Responder'. The Responder can either accept the offer, in which case the money is split as proposed, or reject it, in which case both individuals receive $0. If the Responder's sole motivation is to maximize their own financial payoff, what is the smallest positive amount of money they should logically accept?
Critique of a Responder's Rationale
Evaluating a Responder's Decision
In a one-time interaction, a 'Proposer' offers a 'Responder' a portion of a sum of money. If the Responder accepts, the money is split as proposed; if they reject, both receive nothing. According to a model where the Responder's only goal is to maximize their own financial outcome, they should be willing to accept any offer that is strictly greater than ____.
Learn After
In a one-shot economic interaction, a 'Proposer' is allocated $100 and must offer a portion to a 'Responder'. If the Responder accepts the split, they both get paid accordingly. If the Responder rejects the split, both receive nothing. The Proposer offers the Responder $10. The Responder rejects the offer. From the perspective of a purely self-interested individual, this rejection is irrational. Which statement best analyzes the Responder's action by incorporating the influence of social preferences?
Analyzing Responder Behavior in Different Social Contexts
In a one-shot interaction where one person (the Proposer) offers another person (the Responder) a portion of a sum of money, the Responder's decision to accept any positive offer, no matter how small, is the most common observed behavior because it strictly maximizes their immediate financial outcome.
Explaining Seemingly Irrational Economic Decisions
In a one-shot interaction, a 'Proposer' is given a sum of money and must offer a portion of it to a 'Responder'. If the Responder accepts, the money is split as proposed. If the Responder rejects, neither person receives anything. Match each of the following Responder behaviors to the underlying preference or motivation that best explains it.
Evaluating the Pure Self-Interest Model in a Bargaining Scenario
In a one-shot bargaining scenario, a person who rejects a small but positive share of a sum of money, thereby ensuring both parties get nothing, is demonstrating behavior influenced by ______, which can include considerations like fairness or a desire to punish an ungenerous offer.
Interpreting Bargaining Experiment Results
In a bargaining experiment, a 'Proposer' offers a split of $100 to a 'Responder'. If the Responder rejects the offer, both get nothing. The experiment is run under two conditions:
- Condition 1: Proposers are chosen randomly.
- Condition 2: Proposers earn their role by scoring highest on a general knowledge quiz.
The results show that for any offer below $40, Responders in Condition 2 are significantly more likely to reject the offer than Responders in Condition 1.
Which of the following statements provides the most robust evaluation of this outcome?
Predicting Economic Behavior in Different Social Settings
Comparison of Ultimatum Game Responses: Kenyan Farmers vs. US Students