In a study to examine altruistic behavior, an economics professor recruits college students to participate in a game. The game consists of teams of two, where one person is the proposer and the other the responder. The proposer receives a sum of money and must decide how to split the money with the responder. If the responder likes how the money was split, each person receives the determined amount. If the responder rejects the split, neither player receives any money. This study is an example of a:
A) Pigouvian conjecture.
B) lab experiment.
C) natural experiment.
D) path-dependent experiment.

Question

Quizplus · Accepted Answer

This study is a lab experiment, as it is conducted in a controlled environment to manipulate and observe the behavior of participants. It is not a Pigouvian conjecture (which involves negative externalities), natural experiment (which occurs in a real-world, uncontrolled setting), or path-dependent experiment (which studies how past events affect current choices).

In a Study to Examine Altruistic Behavior, an Economics Professor