In the Ultimatum Game, Allocators Usually Offer Recipients at Least

question 89

Multiple Choice

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)Fear of arousing outrage and abhorrence could influence economic decisions.
• B)People can and often do reject offers that offend their sense of fairness even if doing so means taking a monetary loss.
• C)Some people are careful not to engage in economic behavior that might offend and alienate others.
• D)Allocators can count on recipients to ignore all considerations except financial benefit.

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Definitions:

Batching Economies

The cost advantages gained by producing or processing goods in large batches, as opposed to individually or in small quantities.

Procurement

The process of sourcing and acquiring goods, services, or works from an external source, often through tendering or competitive bidding.