Let’s walk through some scenarios in the Ultimatum game. We’ll first look at a game from the perspective of the Responder. Since the Responder values “fairness,”

they will gain $15 of value when they reject an offer that is strictly less than 50 percent of the pie. Assume that the Proposer can only make offers in increments of $1.

a. If the pot is $20, what is the minimum offer that the Responder will accept? What percent of the pie is this amount?

b. If the pot is $50, what is the minimum offer that the Responder will accept? What percent of the pie is this amount?

c. Let’s say that the Responder cares a lot about “fairness”

and instead gains $25 of value when they reject an offer that is strictly less than 50 percent of the pie.

If the pot is $50, what is the minimum offer that the Responder will accept? What percent of the pie is this amount?