In the ultimatum game, allocators usually offer recipients at least a 40 percent share of the money, and recipients almost always reject offers of less than a 10 percent share
Which of the following does not explain why allocators offer recipients a relatively generous share and why recipients reject meager offers?
A) Some people are careful not to engage in economic behavior that might offend and alienate others.
B) People can and often do reject offers that offend their sense of fairness even if doing so means taking a monetary loss.
C) Allocators can count on recipients to ignore all considerations except financial benefit.
D) Fear of arousing outrage and abhorrence could influence economic decisions.
C
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To determine the price elasticity of demand, we
A) need information on consumers' incomes. B) need to know how much is available. C) compare the percentage change in the quantity demanded to the percentage change in the price. D) compare the change in the quantity to the change in price. E) divide the quantity by the price.
If transactions costs are low, then assigning property rights in a market with external costs
i. increases the deadweight loss. ii. means private transactions are efficient. iii. means that only consumers must pay the external costs. A) i only B) ii only C) ii and iii D) i and iii E) i and ii