Refer to the Ultimatum Game in Figure. Recall that the payoffs are monetary payoffs. a. Suppose that
Question:
a. Suppose that players only care about monetary payoffs, with $1 = 1 util. find the sub game- perfect equilibrium.
b. Suppose that players are imperfectly altruistic. They receive 1 utile for each dollar they earn but ½util for each dollar the other player earns. Write down the extensive form reflecting the new payoffs. Find the sub game-perfect equilibrium.
c. Suppose that players are perfectly altruistic, receiving 1 utile for each dollar in the sum of their earnings. Write down the extensive form reflecting the new payoffs. Find the sub game- perfect equilibrium.
d. Suppose that players are perfectly selfless, getting 1 utile for each dollar the other player earns but no utility for their own earnings. Write down the extensive form reflecting the new payoffs. Find the sub game-perfect equilibrium. Does player 1 end up choosing the outcome that player 2prefers.
Step by Step Answer:
Intermediate Microeconomics and Its Application
ISBN: 978-0324599107
11th edition
Authors: walter nicholson, christopher snyder