Brian and Andrea Are Playing the Ultimatum Game,starting with $100

question 174

Multiple Choice

Brian and Andrea are playing the ultimatum game,starting with $100.The coin flip results in Brian being the one to propose a division of the $100.Brian proposes that he gets $99 and Andrea gets $1.

• A) Because the 99-1 split isn't fair,Brian should not make this offer.
• B) Conventional economic theory predicts that Brian will propose a 99-1 split,just as he did.
• C) Experimental evidence suggests that Andrea will accept the 99-1 split because,even though it isn't fair,it's better than nothing.
• D) Economic theory predicts that Brian should choose a 60-40 split to maximize his payoff.

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Definitions:

Erikson

Erikson refers to Erik Erikson, a developmental psychologist known for his theory on the psychosocial development of humans, highlighting eight stages from infancy to adulthood.

Piaget

A Swiss psychologist known for his pioneering work in child development, especially his theory of cognitive development that describes how children construct a mental model of the world.

Adolescence

A developmental stage between childhood and adulthood characterized by physical, psychological, and social changes.

Industrialized Societies

Societies characterized by a high level of industrialization, urbanization, and reliance on mechanized forms of production and services.