Participants were randomly assigned roles of proposer and accepter/responder. The situation in the first three rounds (treatment 1) is that individuals solely act out of self interest and player 2 has no power to reject the offer of player 1 and in the last three rounds (treatment 2) player 1 has just two strategies: propose a fair split (50/50) or unfair split (70/30) and player 2 has the power to either accept or reject the offer. Recall that only integer amounts out of the hypothetical $10 could have been offered by the proposer to the responder (0-10). What is the theoretical prediction about the split of money for each treatment? How do the results in Figure 1 compare with the theoretical prediction? How would you explain the differences, if any?

Figure 1. The amount out of the hypothetical $10 that the proposer kept in each round (vertical axis). $10.00 ($10) ultimatum ($10) 30 participants $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 4 6 round May 6 2020