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?
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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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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?
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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
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