They saw what happened to sheriff and his posse who surrendered.
Wade offers Dan 1,000 dollars BEFORE his gang arrives. (Dan wonders about that. After all, once Ben's gang arrives, there's no need to pay money. But Wade says: "I like to do things easy.")
So what's the motivation for Dan to surrender?
There is none, thanks to his honour codex. However, he gets tempted for a moment when Wade lays out what he could do with the money: wife doesn't have to work so hard, boys could go to school etc. BUT: Dan would still have to sacrifice his honour, and so it's out of the question for him.
Why would Wade expect him to pick option a?
This is the first time Ben Wade has Dan Evans all to himself. Prior to that scene in the "bridal suite" there was always someone with them. I guess, Wade simply has to try if he can buy off Dan - especially since it is clear from the start that Dan does this ONLY because of the money.
Remember the scene:
Wade: "Rainclouds over Bisbee. Still need that 200 dollars, Dan?"
and later Dan says to Wade: "That drought left me in a hole. I owe people money."
So I guess it makes sense that Wade is trying to bribe Dan.
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