Consider the following decision tree and information when answering the followin

Question

Consider the following decision tree and information when answering the following questions:
The decision tree depicts two players (Jane and Aaron) playing an ultimatum game where Aaron is given $1,000 and asked to propose a way of splitting it with Jane. When Jane learns Aaron’s proposal, Jane chooses whether to accept or reject the split. If Jane accepts the split, both players receive the money according to Aaron’s split proposal. If Jane rejects the split, both players receive nothing. This game will be played only once, so Aaron does not have to worry about reciprocity when making his choice.
There are four sets of payoffs at the terminal nodes of the decision tree. In each node, the dollar amount to the left of the comma represents Aaron’s payoff, and the dollar amount to the right of the comma represents Jane’s payoff.

Assume that Aaron and Jane are two experimental subjects who follow bounded rationality. If Aaron chooses to make an unfair proposal, the likely outcome of the game will be that Jane will ________ and Aaron will receive a payoff of ________.
A. accept; $999
B. accept; $1
C. accept; $0
D. reject; $500
E. reject; $0

Explanation / Answer

The answer is accept and Aaron will receive 999.This results because of bounded rationality. Join will prefer 1 to 0 because that provides him satisfaction

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