In the ultimatum game, what split would be rational for both the person proposing the split and the person who must accept or reject the split ?
Correct answer: C. 99/1
- A. There is no rational solution
- B. 75/25
- C. 99/1
- D. 1/99
- E. 50/50
Explanation
Under the standard self-interest assumption, the proposer offers the smallest positive share, 1%, and keeps 99%, while the responder accepts because receiving 1% is better than receiving nothing. Real-world fairness concerns may produce a 50/50 offer, but the question asks for the rational self-interested outcome.
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