Cilus and Shane Are Playing an Ultimatum Game Where Cilus

question 68

Essay

Cilus and Shane are playing an ultimatum game where Cilus is given $50 and asked to propose a way of splitting it with Shane.When Shane learns Cilus's proposal,Shane chooses whether to accept or reject the split.If Shane accepts the split,both players receive the money according to Cilus's split proposal.If Shane rejects the split,both players receive nothing.This game will be played only once,so Cilus does not have to worry about reciprocity when making his choice.Assume that split proposals can be made only in increments of $1.
According to traditional economic theory,which presumes both players are fully rational and wish to maximize their incomes,what is the outcome of the game? Why is this outcome not observed very often in experimental settings?

---

Definitions:

Collectivism

A cultural value emphasizing the importance of groups and collective goals over individual desires or identities.

Individualism

The principle of being independent and self-reliant, often prioritizing personal goals over group objectives.

Independence

The state or quality of being self-reliant and not dependent on others for decision-making or support.

Imposter Phenomenon

The experience of feeling like a phony, a fraud, or a fake.