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1) In each of the following choice situations, player B chooses between two different allocations of money to player A and herself. In an
1) In each of the following choice situations, player B chooses between two different allocations of money to player A and herself. In an allocation, the first number represents the amount of money to A and the second number represents the amount of money to B. The first four choice situations are dictator games, in which the entire choice situation consists of B's choice. In the last choice situation, B makes a decision after A has rejected the given alternative option. The choice that B made in each decision is underlined. i) B chooses (200,700) v.s. (600, 600) ii) B chooses (0,700) v.s. (400, 400) iii) B chooses (750, 400) v.s. (375, 375) iv) B chooses (400, 400) v.s. (750, 375) v) B chooses (0,700) v.s. (400, 400) after A has turned down (800, 0) Refer to Charness and Rabin's categorization of two-person distributional preferences below: u2(x1, x2)= [px1+(1p)x2. if x2 x1 ex1+(1-0)x2, if x2 < x1 Preferences Description p-0-0 Self-interested P-10-0 Rawlsian p-a-| Utilitarian a) (10 pts) For each of the choice situations (i) through (v), identify whether the choice B made would be consistent with Self-interested (S), Rawlsian (R), and Utilitarian (U) social preferences. [You need to provide separate answers for each of the five decisions, and multiple social preferences may apply in each case.] b) (10pts) Is p = 0.15, = 0.1 consistent with the B's choice in BOTH situations (i) and (ii)? What about p = 0.25, 0.1? How would your answers change if we had = -0.2 ? c) (5pts) Using our discussion of intentions-based social preferences, explain why B might behave differently in situation (v) than in situation (ii).
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