Consider the following scenario when answering the following questions:
Danika and Yolanda are playing an ultimatum game where Yolanda is given an eight-slice pizza and asked to propose a way of splitting it with Danika.When Danika learns Yolanda's proposal,Danika chooses whether to accept or reject the split.If Danika accepts the split,both players receive the slices of pizza according to Yolanda's split proposal.If Danika rejects the split,both players receive nothing.This game will be played only once,so Yolanda does not have to worry about reciprocity when making her choice.Assume that both players enjoy pizza and each would strictly prefer to eat more pizza than less.
-The standard economic model predicts that Yolanda will offer Danika ________ slice(s)and Danika ________ accept the offer.
A) one; will
B) one; will not
C) four; will
D) four; will not
E) seven; will

Question

Quizplus · Accepted Answer

The standard economic model assumes rational behavior, where individuals aim to maximize their utility. In this scenario, Yolanda, knowing that Danika would prefer to receive some pizza over none, will offer the smallest possible share (one slice) to maximize her own share. Danika, rational and preferring some pizza over none, will accept this offer despite its unfairness, as receiving one slice is better than receiving none.

Consider the Following Scenario When Answering the Following Questions