Consider the following decision tree and information when answering the following questions:
The decision tree depicts two players (Jane and Aaron)playing an ultimatum game where Aaron is given $1,000 and asked to propose a way of splitting it with Jane.When Jane learns Aaron's proposal,Jane chooses whether to accept or reject the split.If Jane accepts the split,both players receive the money according to Aaron's split proposal.If Jane rejects the split,both players receive nothing.This game will be played only once,so Aaron does not have to worry about reciprocity when making his choice.
There are four sets of payoffs at the terminal nodes of the decision tree.In each node,the dollar amount to the left of the comma represents Aaron's payoff,and the dollar amount to the right of the comma represents Jane's payoff.

-If Aaron could be 100 percent certain that Jane was rational,did not care about fairness,and always made decisions to maximize her payoff regardless of the situation she might find herself in,Aaron would likely offer a(n)________ proposal and ultimately receive a payoff of ________.
A) unfair; $500
B) unfair; $999
C) unfair; $0
D) fair; $500
E) fair; $0

Question

Consider the following decision tree and information when answering the following questions:
The decision tree depicts two players (Jane and Aaron)playing an ultimatum game where Aaron is given $1,000 and asked to propose a way of splitting it with Jane.When Jane learns Aaron's proposal,Jane chooses whether to accept or reject the split.If Jane accepts the split,both players receive the money according to Aaron's split proposal.If Jane rejects the split,both players receive nothing.This game will be played only once,so Aaron does not have to worry about reciprocity when making his choice.
There are four sets of payoffs at the terminal nodes of the decision tree.In each node,the dollar amount to the left of the comma represents Aaron's payoff,and the dollar amount to the right of the comma represents Jane's payoff.
 
-If Aaron could be 100 percent certain that Jane was rational,did not care about fairness,and always made decisions to maximize her payoff regardless of the situation she might find herself in,Aaron would likely offer a(n)________ proposal and ultimately receive a payoff of ________.
A) unfair; $500 
B) unfair; $999 
C) unfair; $0 
D) fair; $500 
E) fair; $0

Quizplus · Accepted Answer

Given that Jane is rational, does not care about fairness, and always seeks to maximize her payoff, Aaron would likely offer an unfair proposal that gives Jane the smallest possible benefit to ensure her acceptance (since even a small benefit is preferable to none for a rational maximizer). Assuming the total payoff is $1000, offering Jane $1 ensures her acceptance (as it's better than $0), allowing Aaron to keep the remaining $999.

Consider the Following Decision Tree and Information When Answering the Following