The following figure shows the results of the ultimatum game played by farmers in Kenya and university students in the US. How this game works is described in the textbook Unit 4.11. 60 - Students, Emory University (US) (darker shading shows the pfOpOltlon 0! others expected to be rejected) - Farmers (Kenya) (darker shading shows the proportion of oilers expected to he rejecled) j Kenyan latmer Responders are expected to reject a 40% oet am of the time A U1 Half of the Kenyan farmer Propose-rs made an oHer of 4016 Kenyan farmer Responder are expected to (elect a 30% after 48% 0! the time 0 10 20 Fraction of Proposers making the offer Indicated (%) G 8 30 4o 50 Fraction of the pie offered by the Proposer to the Responder (%) 1. What is the predicted outcome of the ultimatum game if the participants are solely self- interested? Is the predicted outcome shown in the figure above? 2. What kind of social preferences do you think motivated the subjects' willingness to reject low offers, even though by doing so they would receive nothing at all? 3. Why do you think that the results differed between the Kenyan farmers and the US students? 4. What responses would you expect if you played this game with two different sets of players your classmates and your family? Explain whether or not you expect the results to differ across these groups. 5. A strike over pay or working conditions may be considered an example of an ultimatum game. Draw a game tree that models a strike as an ultimatum game. (Hint: who is the Proposer and who is the Responder?) 6. How could you use the information from the gure above to suggest what kind of situations might lead to a strike