Jackie and Rhonda are playing an ultimatum game where Jackie is given $100 and asked to propose a way of splitting it with Rhonda. When Rhonda learns Jackie's proposal, Rhonda chooses whether to accept or reject the split. If Rhonda accepts the split, both players receive the money according to Jackie's split proposal. If Rhonda rejects the split, both players receive nothing. This game will be played only once, so Rhonda does not have to worry about reciprocity when making her choice. Traditional economic theory presumes that:

Question

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Traditional economic theory assumes that both players are rational and want to maximize their own payoff. Therefore, Jackie will propose a split that gives her the largest share, and Rhonda will accept the split as long as it gives her some positive payoff (even if it is smaller than Jackie's share). If Jackie proposes a split that is too skewed in her favor, Rhonda may reject it, but only if the rejection leads to both players receiving nothing.

Jackie and Rhonda Are Playing an Ultimatum Game Where Jackie