In a dictator game, player A must divide $100 between player A and player B. In this game, player B does not have the opportunity to reject an offer - he or she goes home with whatever player A offers. Experiments have observed that when player A splits the $100, he or she consistently offers over $10 to player B. Which of the following comments fits best.
A)Although player A is acting as economic theory usually assumes, he or she makes such offers because they seem more fair.
B)Although player A is acting as economic theory usually assumes, he or she makes such offers although they are not fair.
C)Although player A is not acting as economic theory usually assumes, he or she makes such offers because they seem more fair.
D)Although player A is not acting as economic theory usually assumes, he or she makes such offers because they are not fair.

Question

Quizplus · Accepted Answer

In traditional economic theory, player A is assumed to act in a purely self-interested way and offer as little as possible to player B. However, the fact that player A consistently offers over $10 suggests that they are taking into account fairness and the desire to not seem selfish. This goes against the traditional economic assumption, but it does not necessarily mean that the offers are unfair - player A may be trying to balance self-interest with a sense of equity. Choice C is the best answer because it acknowledges the deviation from traditional economic theory but still recognizes that fairness may be a motivating factor in the offers made by player A.

In a Dictator Game, Player a Must Divide $100 Between