An individual, Alex, receives a $1,000 bonus for a project completed with a partner, Ben. Alex has the sole authority to decide how to split the bonus. Despite being able to keep the entire amount without consequence, Alex decides to keep $600 and give $400 to Ben. Based on this action alone, what can be inferred about Alex's preferences?

Match each economic preference type with the scenario that best illustrates it.

Consider an individual with purely self-interested preferences who has the opportunity to split a $200 cash prize. They are presented with two choices: (A) keep all $200 for themself, or (B) keep $199 and give $1 to a stranger . According to the definition of purely self-interested preferences, this individual would be indifferent between choice A and choice B.

Evaluating a Financial Decision from Different Preference Perspectives

Imagine a scenario where a person has to decide how to allocate a $100 windfall between themself and a friend. The person's optimal choice results in them keeping $70 and giving $30 to the friend, even though they could have kept all $100. Which of the following statements provides the most accurate analysis of this choice?

Analyzing Economic Preferences in Action

An individual is given a $500 bonus to be allocated between themself and a teammate. The individual has complete control over the allocation. A purely self-interested person would keep the entire $500. However, this individual finds their own satisfaction is maximized by keeping $400 and giving $100 to the teammate. From the perspective of economic preferences, what does the $100 given to the teammate signify?

An individual has exclusive control over allocating a £200 prize between themself and another person. We can represent two possible allocations as follows:

• Allocation S: (£200 for self, £0 for other)
• Allocation A: (£140 for self, £60 for other)

If a person with purely self-interested preferences chooses Allocation S, and a person with altruistic preferences chooses Allocation A, which statement provides the most accurate analysis of their satisfaction (utility)?

An individual has the sole authority to decide how to allocate a $500 project bonus. They could keep the entire amount for themself. Instead, they choose an allocation where they keep $400 and give $100 to a colleague who also worked on the project. The personal financial cost to this individual for making this altruistic choice is $____.

Context-Dependent Nature of Altruism

Impact of Altruism on Strategies in the Pest Control Game