Conventional economic theory suggests that in the ultimatum game,the player proposing a split of $100 will propose that she gets $99 and that the other player gets $1.By the same reasoning,if the amount to be split is $200,what would the player proposing the split propose
A)that she gets $100 and that the other player gets $100
B)that she gets $198 and that the other player gets $2
C)that she gets $199 and that the other player gets $1
D)that she gets $200 and that the other player gets $0

Question

Quizplus · Accepted Answer

According to conventional economic theory, the proposer will offer the smallest amount possible to the responder while still avoiding rejection. In the case of a $200 split, offering $1 would likely lead to rejection, so the proposer will offer a slightly larger amount to avoid that outcome. Offering $199 gives the responder only $1 less than an even split, but still allows the proposer to keep the majority of the money. Therefore, C is the best choice.

Conventional Economic Theory Suggests That in the Ultimatum Game,the Player