Suppose that Derek proposes a split such that Derek will receive $489.99 and Heriberto will receive $10.01.Traditional economic theory predicts that Heriberto will
A) accept the $10.01 because he values receiving $10.01 more than receiving nothing.
B) accept the $10.01 because he wishes to punish Derek for proposing such an unfair split.
C) reject the $10.01 because he wishes to punish Derek for proposing such an unfair split.
D) reject the $10.01 and also will reject a split such that Derek receives $250 and Heriberto receives $250.
E) sometimes accept the $10.01 and sometimes reject the $10.01,depending on his mood at the time.

Question

Quizplus · Accepted Answer

Traditional economic theory assumes that individuals are rational and will therefore accept any amount of money that is greater than nothing, as receiving $10.01 is better than receiving nothing at all.

Suppose That Derek Proposes a Split Such That Derek Will