Question

So imagine you are playing this game as the second player and you are both given a 10 dollars and the dictator decides to offer you 25 cents and that she/he will keep $9.25. Your only choice is to accept the 25 cents or reject the offer and get no money at all. What would you do? What would be considered ‘rational’ from the perspective of utility maximization? What would you do if this is a continued game and the same scenario will happen multiple times not just once? Do you think others will react the same way you would?

Answer 1

I will accept the offer.

I figure this would be consider 'balanced' since on the off chance that I dismiss the offer, at that point I would not get anything, conversely on the off chance that I acknowledge the idea of the despot, at that point I would get 25 pennies. Subsequently tolerating the offer would be beneficial in contrast with dismissing the proposition.

On the off chance that this a proceeded with game and in the event that a similar situation will happen on numerous occasions not simply once, at that point I would without a doubt dismiss the offer, on the grounds that quite possibly I may improve offer and that may help in utility augmentation.

Truly obviously, others would likewise respond a similar path as I would in light of the fact that every player focuses on utility amplification.