In an ultimatum game, the Proposer moves first, making an offer to the Responder. Once the offer
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In an ultimatum game, the Proposer moves first, making an offer to the Responder. Once the offer is made, the Responder decides to accept or reject the offer. The total amount available is $100 if the players reach an agreement, but both players get $0 if the responder rejects the offer. The proposer is allowed to make offers of $5, $20, $35, $50, $65, $80, or $95. What is the subgame-perfect Nash equilibrium? What would you expect to happen in practice?
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Managerial Economics And Strategy
ISBN: 9780134899701
3rd Edition
Authors: Jeffrey M. Perloff, James A. Brander
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