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2. Ultimatum bargaining game with two players (10 points). Consider an ultimatum bargaining game with two players. Row and Column, and three possible contracts, A,
2. Ultimatum bargaining game with two players (10 points). Consider an ultimatum bargaining game with two players. Row and Column, and three possible contracts, A, B, and Z. The rules of bargaining allow Row to propose one of the three contracts, which Column must then either accept (A) or reject (R). If Column accepts Row's proposal1 then Row's proposal determines the outcome. If Column rejects it, then both get 0. Row's payoffs 'om proposing A. B. Z, are l, 2, and 3, assuming that Colum has accepted the contract. Column's payoffs are 2. 1. -1. respectively. If Colurn rejects the contract the payoffs are D for both. a) Write down the Normal-form representation of the game as a matrix and nd all Nash equilibria of this game (5 points). 13) Find all SPNE of this game (5 points)
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