Suppose in an ultimatum game, out of an initial endowment of $10, a proposer offered to keep $8 and offer $2 to the receiver. The probability of this offer being rejected will be lower if:
A) the only other alternative option is one where the proposer gets $10 and the receiver gets $0.
B) the only other alternative option is one where both the proposer and the receiver get $5 each.
C) the game is played using a double-blind protocol instead of a single-blind protocol.
D) the game is played using a single-blind protocol instead of a double-blind protocol.

Question

Quizplus · Accepted Answer

When the only other alternative is the proposer getting $10 and the receiver getting $0, the $2 offer seems more generous, reducing the likelihood of rejection.

Suppose in an Ultimatum Game, Out of an Initial Endowment