Experiments show that when real people play the ultimatum game, starting with $100,
A) Player A usually proposes giving Player B more than $50.
B) Player B usually accepts Player A's proposal if Player A proposes giving Player B $30 or $40.
C) players show themselves to be rational wealth-maximizers.
D) Both B and C are correct.

Question

Quizplus · Accepted Answer

The ultimatum game involves two players, A and B, where A proposes a way of splitting a sum of money (in this case, $100) between the two of them, and B decides whether to accept or reject the proposal. If B rejects the proposal, both players get nothing. Experiments have shown that in this game, Player A often proposes to give Player B more than 50% of the total amount ($50). However, Player B tends to reject proposals that give them less than $30-$40. This suggests that people are not always rational wealth-maximizers and may place a higher value on fairness and equal distribution of wealth. This is supported by the fact that people are more likely to reject unequal offers even if it comes at a personal cost. Therefore, the correct answer is B.

Experiments Show That When Real People Play the Ultimatum Game