Asked by sonia umezurike on Jun 14, 2024
Verified
Nash equilibria can be used to make predictions about human behavior in noncooperative games.Behavioral game theory studies actual human interaction, and has found inconsistencies between observed human behavior and Nash-predicted behavior.Which of the following is NOT an inconsistency pointed out by behavioral economists?
A) In ultimatum games, proposers should always offer to give responders the minimum possible split, regardless of whether it is perceived as "unfair" or not.
B) In ultimatum games, offers perceived as "unfair" are frequently rejected.
C) In ultimatum games, responders are less likely to turn down "unfair" offers if the dollar amount is large.
D) Third party observers of ultimatum games will frequently punish what they perceive as "unfair" divisions, even at a cost to themselves.
E) In ultimatum games, men tend to receive more favorable divisions, particularly when divisions are proposed by women.
Nash Equilibria
A concept in game theory describing a situation where no player can gain by unilaterally changing their strategy if the strategies of the other players remain unchanged.
Noncooperative Games
Noncooperative games are scenarios in game theory where players make decisions independently, without collaboration, often under the assumption that every participant is trying to maximize their own gain without concern for others' outcomes.
Behavioral Game Theory
An extension of game theory that incorporates insights from psychology to understand decisions in strategic situations where players interact.
- Distinguish and clarify the myriad cognitive biases and heuristics that steer economic decision-making, including the anchoring effect and hyperbolic discounting.
Verified Answer
DT
Deidre TurnerJun 15, 2024
Final Answer :
A
Explanation :
In ultimatum games, proposers are typically observed to offer more than the minimum possible split, often in order to avoid being perceived as unfair and therefore having their offer rejected. This is not consistent with the Nash equilibrium prediction of offering the minimum possible split.
Learning Objectives
- Distinguish and clarify the myriad cognitive biases and heuristics that steer economic decision-making, including the anchoring effect and hyperbolic discounting.