Question
Alba (A) is asked to participate in an experiment called a Dictator Game. She is given $20 (called her endowment) with which to make a
Alba (A) is asked to participate in an experiment called a Dictator Game. She is given $20 (called her "endowment") with which to make a set of choices in two different scenarios where she is paired with an anonymous partner:
i. each dollar she sends to her partner reduces Alba's endowment by $2 (that is, for each dollar she sends, her partner gets $0.50).
ii. Each dollar she sends to her partner reduces her endowment by $1 (that is, for each dollar she sends, her partner gets $1.00).
iii. Each dollar she sends to her partner reduces her endowment by $0.50) (that is, for each dollar she sends, her partner gets $2.00).
If we define Alba's payoffs as A and her partner B's payoffs as B, which of the following equations describes the feasible frontier presented to Alba in scenario i?
a. B = 40 - 2A
b. B = 20 - A
c. B = 10 - 0.5A
d. None of the above
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