Eli and Peyton are playing the ultimatum game,starting with $100.The coin flip results in Eli being the one to propose a division of the $100.If Eli acts as economic theory assumes,he should propose that
A) he gets $30 and Peyton gets $70.
B) he gets $50 and Peyton gets $50.
C) he gets $60 and Peyton gets $40.
D) he gets $99 and Peyton gets $1.

Question

Quizplus · Accepted Answer

Economic theory suggests that Eli should propose the division that maximizes his own benefit, assuming Peyton will accept any non-zero offer. Therefore, Eli should propose keeping $99 for himself and giving $1 to Peyton.

Eli and Peyton Are Playing the Ultimatum Game,starting with $100