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:

Producer Surplus

The discrepancy in the anticipated versus actual financial returns for producers selling a good or service.

Croissants

A flaky, buttery pastry of Austrian origin that is associated with French cuisine and often eaten for breakfast.

Producer Surplus

The difference between the amount producers are willing and able to sell a good for and the actual amount they do sell it for.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive in the market.