Consider the accompanying decision tree and information to answer the questions that follow.
The decision tree depicts two players (Jane and Aaron) playing an ultimatum game where Aaron is given $1,000 and asked to propose a way of splitting it with Jane. When Jane learns Aaron's proposal, Jane chooses whether to accept or reject the split. If Jane accepts the split, both players receive the money according to Aaron's split proposal. If Jane rejects the split, both players receive nothing. This game will be played only once, so Aaron does not have to worry about reciprocity when making his choice.
There are four sets of payoffs at the terminal nodes of the decision tree. In each node, the dollar amount to the left of the comma represents Aaron's payoff, and the dollar amount to the right of the comma represents Jane's payoff.

-If Aaron were to offer an unfair proposal,experimental results show that Jane would likely punish him by making herself:
A) worse off by $1 and rejecting his offer.
B) better off by $1 and rejecting his offer.
C) worse off by $999 and rejecting his offer.
D) worse off by $500 and rejecting his offer.
E) worse off by $1,000 and rejecting his offer.

Question

Consider the accompanying decision tree and information to answer the questions that follow.
The decision tree depicts two players (Jane and Aaron) playing an ultimatum game where Aaron is given $1,000 and asked to propose a way of splitting it with Jane. When Jane learns Aaron's proposal, Jane chooses whether to accept or reject the split. If Jane accepts the split, both players receive the money according to Aaron's split proposal. If Jane rejects the split, both players receive nothing. This game will be played only once, so Aaron does not have to worry about reciprocity when making his choice.
There are four sets of payoffs at the terminal nodes of the decision tree. In each node, the dollar amount to the left of the comma represents Aaron's payoff, and the dollar amount to the right of the comma represents Jane's payoff.
 
-If Aaron were to offer an unfair proposal,experimental results show that Jane would likely punish him by making herself:
A) worse off by $1 and rejecting his offer. 
B) better off by $1 and rejecting his offer. 
C) worse off by $999 and rejecting his offer. 
D) worse off by $500 and rejecting his offer. 
E) worse off by $1,000 and rejecting his offer.

Quizplus · Accepted Answer

Experimental results in behavioral economics, such as those from the Ultimatum Game, show that people often reject unfair offers even if it means they are slightly worse off, like losing $1, to punish the proposer.

Consider the Accompanying Decision Tree and Information to Answer the Questions