Peggy and Marcy are playing an ultimatum game where Peggy is given $500 and asked to propose a way of splitting it with Marcy.When Marcy learns Peggy's proposal,Marcy chooses whether to accept or reject the split.If Marcy accepts the split,both players receive the money according to Peggy's split proposal.If Marcy rejects the split,both players receive nothing.This game will be played only once,so Peggy does not have to worry about reciprocity when making her choice.
Which of the following split proposals would Marcy be most likely to accept if she and Peggy were playing the game in an experimental session and both players adhered to bounded rationalism?
A) Peggy receives $449.99 and Marcy receives $50.01.
B) Peggy receives $499.99 and Marcy receives $0.01.
C) Peggy receives $400.00 and Marcy receives $100.00.
D) Peggy receives $350.00 and Marcy receives $150.00.
E) Peggy receives $250.00 and Marcy receives $250.00.

Question

Quizplus · Accepted Answer

Given that both players adhere to bounded rationalism, they are likely to prefer fair outcomes. Option E, which proposes an equal split of $250 each, is the most equitable distribution and thus the most likely to be accepted by Marcy.

Peggy and Marcy Are Playing an Ultimatum Game Where Peggy