<\/div><\/div><\/div> b) Now suppose that whereas player 1 is self-interested and only cares about his own monetary payoff, player 2 may not be. Player 2's utility function is given by W2 = U2 - a max (U1 - Uz, 0) - b max (U2-u1, 0) where u, and uzare the monetary payoffs for players 1 and 2 respectively and a and b are positive parameters, a measures inferiority aversion and b measures superiority aversion. Player 1 does not know a and b but assumes a-0 with probability 60% and a-4 With probability 40% and b=0 with probability 45% and b-0.6 with probability 55%, How does this change your answer to a)? \") For the data in b), what is the chance that player 2 rejects player 1's proposal at equilibrium?rebate announcement, by how much is their profit reduced relative to c)? 7. Two players have $1 to divide. Player 1 offers to keep $x. Player 2 either accepts this proposal or rejects it in which case both players get zero. a) Find the perfect equilibrium. Question continues on the next page",
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"isbn": "978-0470477151, 978-0-470-5562, 470556242, 0-470-55624-2, 9780470556245, 978-0470507018",
"edition": "7th Edition",
"authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso",
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"question_posted": "2024-06-21 00:06:55",
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