Levitt (2007)- ”What do laboratory experiments measuring social preferences reveal about the real world?.

Question 1

What is the ultimatum game

Answer 1

A two-stage game where two people, a proposer and a
responder, bargain over a fixed amount of money. In the first stage, the proposer offers a split of the money, and in the second stage, the responder decides to accept or reject the offer. If accepted, each player receives money
according to the
offer; if rejected, each player receives nothing.

Question 2

What does thestandardeconomicmodelpredict of the ultimatum game?

Answer 2

Proposer offers the lowest amount to the responder possible

Responder accepts any offer above 0

Question 3

What is the aim of the paper?

Answer 3

To find out if how people behave in the lab is similar to how they will in real life.

Question 4

Why might labarotary experiments differ to real-world behaviour?

Answer 4

Scrutiny- makes people behave differently