Edgar and Felicity are players in an ultimatum game for $100, where Felicity is the proposer and Edgar is the responder. Suppose that Felicity proposes that she receive $95, while Edgar receives only $5. How would behavioral economists expect Edgar to respond?

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Quizplus · Accepted Answer

Behavioral economists have found that people often reject offers they perceive as unfair, even if rejecting the offer means they get nothing. In this case, Edgar might reject Felicity's offer of $5 out of a sense of unfairness, despite the fact that accepting it would leave him economically better off than rejecting it.

Edgar and Felicity Are Players in an Ultimatum Game for $100