Suppose Gina and Henry play two rnds of the ultimatum game. In the first round they play for $10; in the second round they play for $1,000. In the first round Gina suggests an 80/20 split ($8 to Gina, $2 to Henry), but Henry quickly rejects the offer as

unfair. Assuming Gina is interested in gaining financially from the experience and that she understands behavioral economics, we would expect her to:

A. offer the same relative split ($800/$200), knowing that Henry will accept the offer because
the dollar amount he would forgo by rejecting it is substantial.
B. offer a more unequal split ($900/$100) in order to gain more for herself and figuring Henry
will accept the split because $100 is better than nothing.
C. offer a more equal split ($700/$300) to increase the probability that Henry will accept the
offer.
D. offer Henry more than half of the pot to ensure acceptance of the offer.


Answer: C

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