Consider the Following Scenario to Answer the Questions That Follow

question 100

Multiple Choice

Consider the following scenario to answer the questions that follow.
Sarah and Laura are playing an ultimatum game where Laura is given an eight-slice pizza and asked to propose a way of splitting it with Sarah. When Sarah learns Laura's proposal, Sarah chooses whether to accept or reject the split. If Sarah accepts the split, both players receive the slices of pizza according to Laura's split proposal. If Sarah rejects the split, both players receive nothing. This game will be played only once, so Laura does not have to worry about reciprocity when making her choice. Assume that both players enjoy pizza and each would strictly prefer to eat more pizza than less.
-Assume the game is played in an experimental session and both players follow bounded rationality.If Laura offers Sarah ________ slice(s) ,Sarah will be more likely to accept the offer than if Laura were to offer ________ slice(s) .

• A) one; two
• B) two; three
• C) one; three
• D) four; one
• E) one; four

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Definitions:

Dividend Payment

A distribution of a portion of a company's earnings to its shareholders, typically in the form of cash or stock.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and a share in profits through dividends.

Paid-In Capital

Paid-in capital is the amount of money a company has received from shareholders in exchange for shares of stock.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by its issuer.