Scenario I The Following Scenario Describes Research Findings Discussed in the Following

question 12

Multiple Choice

Scenario I
The following scenario describes research findings discussed in the following review article:
Cameron, C. C. & Thaler, R. H. (1995) . Anomalies: Ultimatums, dictators, and manners. Journal of Economic Perspectives, 9(19) , 209-219.
In the ultimatum game, two participants are assigned to be either the "Divider" or the "Decider" by a coin flip. The Divider is given a sum of money, such as $10, and is instructed to offer some non-zero portion of it to the Decider. If the Decider accepts, she gets to keep what was offered and the Divider keeps the rest. If the Decider rejects the deal, both players get nothing. Both players are made aware of all of these rules and then the game begins. Under these conditions, Dividers usually offer a little less than $5 and Deciders usually accept this amount. If Dividers offer less, Deciders often reject and both players get nothing. A similar game is termed the dictator game. Players are randomly assigned to be either the "Allocator" or the "Receiver." The Allocator is given a sum of money and makes a decision about how much money she would like to give the Receiver, who must accept this result. Allocators in this game usually offer some money to the Receiver, but typically less than the Dividers in the ultimatum game.
-(Scenario I) Consider the real-world observation that lottery winners tend to give away more of their money to friends and family than self-made millionaires give to theirs. Using the dictator game, which of these is the best way to model this in the laboratory?

• A)Study differences in Allocator behavior when the sum of money ranges from small to large.
• B)Compare typical performance with a modification in which the winner of a game of skill gets to be the Allocator.
• C)Study Allocator behavior under conditions where the Receiver is either a friend or a stranger.
• D)Compare allocations to Receivers who are either friends or strangers in a game in which the Allocator's own money is used.

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Definitions:

Pipeline Inventory

Inventory that is in transit or in the process of being transported between the supplier and the buyer, often considered part of the overall inventory on order but not yet available for use or sale.

Safety Inventory

Additional stock kept to mitigate the risk of stockouts due to fluctuations in demand or supply lead times.

Cycle Inventory

Inventory that is held or processed in batches, cycling through the production and supply chain processes.

Retailers

Businesses or individuals that purchase goods from manufacturers or wholesalers to sell them directly to consumers.