Suppose gina and henry play two rounds of the ultimatum game. in the first round they play for $10; in the second round they play for $1,000. in the first round gina suggests an 80/20 split ($8 to gina, $2 to henry), but henry quickly rejects the offer as unfair. if in the second round gina offers the same split ($800 to gina, $200 to henry), research by behavioral economists suggests that henry will
a. accept the offer because the dollar amount he would forgo by rejecting is substantial. b. counteroffer with a more even split. c. weigh the offer much more carefully because of the dollar amounts involved but ultimately reject the offer. d. exhibit a stronger negative reaction than the first time and ultimately reject the offer.

D) exhibit a stronger negative reaction than the first time and ultimately reject the offer.

Explanation:

Statistically, over 80% of the participants reject unfair proposals. As more money is involved, the percentage of rejection tends to diminish, but $200 could only be considered a lot of money in extremely poor countries.

Some experiments carried out in the US and other countries point out that when the unfair offer involves around 80% (at least 40 weeks pay) of annual income, the percentage of rejections falls to almost 0. Probably if Gina offered $20,000 to Henry and kept $80,000 to herself, then Henry would accept.

Most of the times repeated unfair proposals where the amounts are very small tend to be seen as offensive by the receiver.