In the ultimatum game, one reason players don't choose the rational offer is A. they are worse off by taking the offer. B. that there are too many possible outcomes to reasonably consider. C. most people believe in reciprocity, and will therefore get even if the prosper treats them badly. D. that it is not a Nash equilibrium.

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Business

Rex Pace

8 March, 13:38

In the ultimatum game, one reason players don't choose the rational offer is A. they are worse off by taking the offer. B. that there are too many possible outcomes to reasonably consider. C. most people believe in reciprocity, and will therefore get even if the prosper treats them badly. D. that it is not a Nash equilibrium.

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Leyla Nguyen · Answer 1

C. Most people believe in reciprocity, and will therefore get even if the prosper treats them badly.

Explanation:

In recent times, this game has formed to be a great experimental tool to economists where a certain amount of money is been divided into two equal halves between the proposer and the other player. It is noted that at the end of repeatedly playing the game, ten times in their experiment, players almost always converges to the initial median effort level of four or five.

And in the other hand, a reasonable amount of players believe in reciprocity, and will therefore get even if the prosper treats them badly.

Most of this games and its forms have a set of Pareto ranked pure strategy Nash equilibria, one for each possible effort level.