Scenario: The ultimatum game is a two-player game played as follows. One player, the proposer, is told to divide a sum of money between the two players. The proposer proposes how to divide the sum. The other player, the responder, then chooses to either accept or reject the proposal. If the responder accepts the proposal, the money is split according to the proposal. If the responder rejects the proposal, neither receives any money. When this game is played by real people from a common social group, it is frequently observed that the proposer offers close to 50-50 split and the responder rejects offers below 30 percent of the sum.
-Refer to the scenario above.According to the theory presented in the textbook,if the proposer offered 1 percent,should the responder accept?
A) Yes, because, if the responder rejected the offer, he will end up with nothing.
B) Yes, because 1 percent is the maximum the proposer will ever offer.
C) No, because, if the responder rejected the offer, he will get more.
D) No, because, 1 percent is the minimum the responder can expect from the proposer.

Question

Quizplus · Accepted Answer

Accepting any positive amount of money is rational if the alternative is receiving nothing, as rejecting the offer results in both players receiving no money.

Scenario: the Ultimatum Game Is a Two-Player Game Played as Follows