Suppose Gina and Henry play two rounds of the ultimatum game. In the first round they play for $10; in the second round they play for $1,000. In the first round Gina suggests an 80/20 split ($8 to Gina, $2 to Henry) , but Henry quickly rejects the offer as unfair. If in the second round Gina offers the same split ($800 to Gina, $200 to Henry) , research by behavioral economists suggests that Henry will
A) accept the offer because the dollar amount he would forgo by rejecting is substantial.
B) counteroffer with a more even split.
C) weigh the offer much more carefully because of the dollar amounts involved but ultimately reject the offer.
D) exhibit a stronger negative reaction than the first time and ultimately reject the offer.
Correct Answer:
Verified
Q79: Suppose Faith and Mickey are playing both
Q268: Suppose Gina and Henry play two rounds
Q269: Suppose Justine and Sarah are playing the
Q270: The facts that many people give to
Q271: Which of the following best describes the
Q274: The threat of rejection in market transactions
A)leads
Q275: The threat of rejection in market transactions
A)leads
Q276: Selfishness is
A)exhibited more strongly in the ultimatum
Q277: Neoclassical economic analysis tends to disregard the
Q278: Suppose Justine and Sarah are playing the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents