In an experiment, two strangers are given the opportunity to share $10

Question

In an experiment, two strangers are given the
opportunity to share $100, subject to the following
constraints: One person—the “proposer”—is to
suggest how to divide the money and can make only
  (5)   one such proposal. The other person—the
“responder”— must either accept or reject the offer
without qualification. Both parties know that if the
offer is accepted, the money will be split as agreed,
but if the offer is rejected, neither will receive
  (10)   anything.

This scenario is called the Ultimatum Game.
Researchers have conducted it numerous times with a
wide variety of volunteers. Many participants in the
role of the proposer seem instinctively to feel that
  (15)   they should offer 50 percent to the responder, 
because such a division is “fair” and therefore likely to be
accepted. Two-thirds of proposers offer responders
between 40 and 50 percent. Only 4 in 100 offer less
than 20 percent. Offering such a small amount is
  (20)   quite risky; most responders reject such offers. This is
a puzzle: Why would anyone reject an offer as too
small? Responders who reject an offer receive
nothing, so if one assumes—as theoretical economics
traditionally has—that people make economic
  (25)   decisions primarily out of rational self-interest, one
would expect that an individual would accept any
offer.

Some theorists explain the insistence on fair
divisions in the Ultimatum Game by citing our
  (30)   prehistoric ancestors’ need for the support of a strong
group. Small groups of hunter-gatherers depended for
survival on their members’ strengths. It is
counterproductive to outcompete rivals within one’s
group to the point where one can no longer depend
  (35)   on them in contests with other groups. But this
hypothesis at best explains why proposers offer large
amounts, not why responders reject low offers.

A more compelling explanation is that our
emotional apparatus has been shaped by millions of
  (40)   years of living in small groups, where it is hard to
keep secrets. Our emotions are therefore not finely
tuned to one-time, strictly anonymous interactions. In
real life we expect our friends and neighbors to
notice our decisions. If people know that someone is
  (45)   content with a small share, they are likely to make
that person low offers. But if someone is known to
angrily reject low offers, others have an incentive to
make that person high offers. Consequently, evolution
should have favored angry responses to low offers; if
  (50)   one regularly receives fair offers when food is
divided, one is more likely to survive. Because oneshot 
interactions were rare during human evolution,
our emotions do not discriminate between one-shot
and repeated interactions. Therefore, we respond
  (55)   emotionally to low offers in the Ultimatum Game
because we instinctively feel the need to reject dismal
offers in order to keep our self-esteem. This
self-esteem helps us to acquire a reputation that is
beneficial in future encounters.    1 
 1. Which one of the following most accurately summarizes the main idea of the passage?

(A) Contrary to a traditional assumption of theoretical economics, the behavior of participants in the Ultimatum Game demonstrates that people do not make economic decisions out of rational selfinterest.
(B) Although the reactions most commonly displayed by participants in the Ultimatum Game appear to conflict with rational selfinterest, they probably result from a predisposition that had evolutionary value.
(C) Because our emotional apparatus has been shaped by millions of years of living in small groups in which it is hard to keep secrets, our emotions are not finely tuned to one-shot, anonymous interactions.
(D) People respond emotionally to low offers in the Ultimatum Game because they instinctively feel the need to maintain the strength of the social group to which they belong.
(E) When certain social and ev olutionary factors are taken into account, it can be seen that the behavior of participants in the Ultimatum Game is motivated primarily by the need to outcompete rivals.

2 
 2. The passage implies that the Ultimatum Game is

(A) one that requires two strangers to develop trust in each other
(B) responsible for overturning a basic assumption of theoretical economics
(C) a situation that elicits unpredictable results
(D) a type of one-shot, anonymous interaction
(E) proof that our emotional apparatus has been shaped by millions of years of living in small groups

3 
 3. The author’s primary purpose in the passage is to

(A) survey existing interpretations of the puzzling results of an experiment
(B) show how two theories that attempt to explain the puzzling results of an experiment complement each other
(C) argue that the results of an experiment, while puzzling, are valid
(D) offer a plausible explanation for the puzzling results of an experiment
(E) defend an experiment against criticism that methodological flaws caused its puzzling results

4 
 4. Which one of the following sentences would most logically conclude the final paragraph of the passage?

(A) Contrary to the assumptions of theoretical economics, human beings do not act primarily out of self-interest.
(B) Unfortunately, one-time, anonymous interactions are becoming increasingly common in contemporary society.
(C) The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers.
(D) High self-esteem and a positive reputation offer individuals living in small groups many other benefits as well.
(E) The behavior of participants in the Ultimatum Game sheds light on the question of what constitutes a “fair” division.

5 
 5. In the context of the passage, the author would be most likely to consider the explanation in the third paragraph more favorably if it were shown that

(A) our prehistoric ancestors often belonged to large groups of more than a hundred people
(B) in many prehistoric cultures, there were hierarchies within groups that dictated which allocations of goods were to be considered fair and which were not
(C) it is just as difficult to keep secrets in relatively large social groups as it is in small social groups
(D) it is just as counterproductive to a small social group to allow oneself to be outcompeted by one’s rivals within the group as it is to outcompete those rivals
(E) in many social groups, there is a mutual understanding among the group’s members that allocations of goods will be based on individual needs as opposed to equal shares

desertEagle · Answer

2. The passage implies that the Ultimatum Game is

(A) one that requires two strangers to develop trust in each other - no trust is needed 
(B) responsible for overturning a basic assumption of theoretical economics - no overturning is there - in fact they try to explain a seeming descrepancy
(C) a situation that elicits unpredictable results - it is not unpredictable as theories in para 3 and 4 have tried to explain it
(D) a type of one-shot, anonymous interaction - this is true - refer to first para
(E) proof that our emotional apparatus has been shaped by millions of years of living in small groups - "Proof" is extreme wording - even the last para says  A more compelling explanation  - wrong

hritiksingh · Answer

please explain question3 im stuck with option B and the correct answer.How will you eliminate option B

Jaman81 · Answer

Can anyone explain question no. 4?  The correct option says "The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers". However, the final passage is all about the Responder's reason to reject low offers and evolution should favor angry responses to low offers.

MartyTargetTestPrep · Answer

Here's (B) in question 3.

(B) show how two theories that attempt to explain the puzzling results of an experiment complement each other

The choice starts off mentioning two theories, and the passage does discuss two theories, "need for the support of a strong group" and "evolution should have favored angry responses to low offers." So, in that choice (B) mentions two theories, it's correct.

However, the choice is incorrect overall because is says that the passage shows how two theories "complement each other" (work together to make each other better). The two theories have some related elements, but they don't work together. Rather, the passage conveys that they provide different reasons for the results of the experiment. So, (B) doesn't accurately describe what the passage does.

Nielgmat · Answer

5. In the context of the passage, the author would be most likely to consider the explanation in the third paragraph more favorably if it were shown that

As per the Author, the 3rd para offers a hypothesis that explains why proposers offer fair shares, but does not explain why responders reject low shares. Therefore the author is likely to accept the explanation offered by 3rd para if  it were to explain why responders reject low offers . Let's look for a choice that explains this.

(A) our prehistoric ancestors often belonged to large groups of more than a hundred people -  this does not even address the issue at hand.

(B) in many prehistoric cultures, there were hierarchies within groups that dictated which allocations of goods were to be considered fair and which were not -  this is close. So the proposers were following the hierarchy in making low offers, why were responders rejecting those offers. Still some loose ends here.

(C) it is just as difficult to keep secrets in relatively large social groups as it is in small social groups.  - does not address the issue at hand.

(D) it is just as counterproductive to a small social group to allow oneself to be outcompeted by one’s rivals within the group as it is to outcompete those rivals -

This is the relevant part of the para - "It is counterproductive to outcompete rivals within one’s group to the point where one can no longer depend on them in contests with other groups."
Option D fits perfectly after this so as to explain why responders rejected low offers - because it was counter productive to accept being outcompeted. - CORRECT CHOICE.

(E) in many social groups, there is a mutual understanding among the group’s members that allocations of goods will be based on individual needs as opposed to equal shares. -  Similar to option B. Explains proposers actions but not responders'.

Nielgmat · Answer

I'll try..
When 'logically concluding ' the final para, we need to look for an option that will carry forward the last 'idea' being discussed. The last idea being discussed is -  Reason we respond emotionally to low offers is that we instinctively feel the need to  reject dismal offers in order to keep our self-esteem . This  self-esteem helps us to acquire a reputation  that is beneficial in future encounters.

So something that talks further on 'reputation' or 'self esteem' should be our correct choice. The correct choice should also NOT repeat what is already discussed. Let us look for it.

4. Which one of the following sentences would most logically conclude the final paragraph of the passage?

(A) Contrary to the assumptions of theoretical economics, human beings do not act primarily out of self-interest. -  Way off the mark from what was last discussed.

(B) Unfortunately, one-time, anonymous interactions are becoming increasingly common in contemporary society. -  off the mark

(C) The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers. -  what else can 'favourable reputation' help to explain in context of the passage is a logical add on. It also adds something that is previously not alluded to. - CORRECT CHOICE.

(D) High self-esteem and a positive reputation offer individuals living in small groups many other benefits as well. -  This is close, but loses out to Option C because the last part of the para already tells us that self esteem and reputation are "beneficial in future encounters". So this option does not bring in any new information.

(E) The behavior of participants in the Ultimatum Game sheds light on the question of what constitutes a “fair” division -  off the mark.

gullyboy09 · Answer

Hi  MartyMurray ,  GMATNinja

What's puzzling is that -".. one would expect that an individual would accept any offer", but they are not. But that's a small set, not the complete set of observations. Now option B generalizes it to most (first part of the option). Are we considering one who offered 40-50 are also irrational? If yes, then passage should have raised it during mentioning them itself rather mentioning specifically for rejection ones.

guddo · Answer

1. Which one of the following most accurately summarizes the main idea of the passage?

The passage explains why people reject low offers in the Ultimatum Game even though that seems irrational: it is driven by evolved emotions shaped for reputation-based, repeated interactions, not one-shot anonymous ones. The correct summary should capture this explanation, not just restate the puzzle.

(A) Contrary to a traditional assumption of theoretical economics, the behavior of participants in the Ultimatum Game demonstrates that people do not make economic decisions out of rational self-interest.

Too broad. The passage does not claim people generally do not act rationally; it explains this specific pattern as an evolutionary carryover.

(B) Although the reactions most commonly displayed by participants in the Ultimatum Game appear to conflict with rational self-interest, they probably result from a predisposition that had evolutionary value.

This matches the main idea. It captures the apparent conflict with rational self-interest and the passage’s evolutionary explanation.  Best fit.

(C) Because our emotional apparatus has been shaped by millions of years of living in small groups in which it is hard to keep secrets, our emotions are not finely tuned to one-shot, anonymous interactions.

This is an important supporting point, but it is narrower than the overall main idea, which is explaining the Ultimatum Game behavior (especially rejecting low offers) via evolutionary value.

(D) People respond emotionally to low offers in the Ultimatum Game because they instinctively feel the need to maintain the strength of the social group to which they belong.

This is the first hypothesis, and the passage says it does not explain responder rejection well, so it cannot be the main idea.

(E) When certain social and evolutionary factors are taken into account, it can be seen that the behavior of participants in the Ultimatum Game is motivated primarily by the need to outcompete rivals.

Wrong direction. The passage says it is counterproductive to outcompete group members, and the favored explanation is reputation and self-esteem, not rivalry.

Answer: (B)

canopyinthecity · Answer

In Q4 A, C, D all seem suitable, can anyone explain why (C) is the best choice?  KarishmaB   Bunuel

guddo · Answer

4. Which one of the following sentences would most logically conclude the final paragraph of the passage?

The final paragraph explains that human emotions evolved in repeated social interactions, where developing a favorable reputation could improve future treatment. This explains why responders instinctively reject unfair offers even in a one-time anonymous game.  The most logical concluding sentence extends this same evolutionary explanation to the behavior of proposers.

(A) Contrary to the assumptions of theoretical economics, human beings do not act primarily out of self-interest.

Incorrect. Too broad. The passage shows that behavior in the Ultimatum Game does not fit a simple model of immediate rational self-interest, but it does not conclude that humans generally do not act primarily out of self-interest.

(B) Unfortunately, one-time, anonymous interactions are becoming increasingly common in contemporary society.

Incorrect. The passage says such interactions were rare during human evolution, but says nothing about whether they are becoming more common today.

(C) The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers.

Correct.   The paragraph has explained why concern with reputation can cause responders to reject low offers. The same concern could also help explain why proposers instinctively make fair offers. This naturally extends the paragraph's argument and connects it back to the earlier discussion of proposer behavior.

(D) High self-esteem and a positive reputation offer individuals living in small groups many other benefits as well.

Incorrect. This is plausible, but it introduces unspecified additional benefits rather than completing the argument about behavior in the Ultimatum Game.

(E) The behavior of participants in the Ultimatum Game sheds light on the question of what constitutes a “fair” division.

Incorrect. The passage is concerned with why people make and reject certain offers, not with establishing what objectively counts as a fair division.

Answer: (C)

KarishmaB · Answer

4. Which one of the following sentences would most logically conclude the final paragraph of the passage?

(A) Contrary to the assumptions of theoretical economics, human beings do not act primarily out of self-interest. 
 (B) Unfortunately, one-time, anonymous interactions are becoming increasingly common in contemporary society. 
 (C) The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers. 
 (D) High self-esteem and a positive reputation offer individuals living in small groups many other benefits as well. 
 (E) The behavior of participants in the Ultimatum Game sheds light on the question of what constitutes a “fair” division.

P1 - The Ultimatum game explanation
P2 - Research on result of ultimatum game. The results are against what  theoretical economics says.  
P3 - A Hypothesis explaining the results. But it explains  why proposers offer large amounts, not why responders reject low offers. 
 P4 - A more compelling explanation .... Therefore, we respond emotionally to low offers to keep our self-esteem. This self-esteem helps us to acquire a reputation that is beneficial in future encounters.

The more compelling explanation tells us why people reject low offers. What could be the most appropriate last sentence here?

(A) Contrary to the assumptions of theoretical economics, human beings do not act primarily out of self-interest.
  
 This would be an odd turn here. P3 and P4 do not discuss theoretical economics at all. We have already established that theoretical economics does not explain the results and we are trying to come up with other theories.

(B) Unfortunately, one-time, anonymous interactions are becoming increasingly common in contemporary society.
  
 Irrelevant. Our instinct has developed by living in small groups with repeated interaction. We are using that to explain the result of the game.

(C) The instinctive urge to acquire a favorable reputation may also help to explain the desire of many proposers in the Ultimatum Game to make “fair” offers.

This is great. It explains how the second "more compelling explanation" could explain not only rejection of a low offer but also proposer's fair offer. So this actually makes it a more compelling explanation. It doesn't explain just one facet, but both. The problem the author had with the previous hypothesis was that it explained only one facet of the interaction.

(D) High self-esteem and a positive reputation offer individuals living in small groups many other benefits as well.

The point under discussion is how to explain the results of the Ultimatum game. Other benefits would likely be the first line of the next paragraph, if at all.

(E) The behavior of participants in the Ultimatum Game sheds light on the question of what constitutes a “fair” division.
  
 Question of what constitutes a “fair” division has not been raised. Out of scope.  
  
Answer (C)

In an experiment, two strangers are given the opportunity to share $10

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In an experiment, two strangers are given the opportunity to share $10

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