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Consider a modified version of the ultimatum game discussed in class, with alternating offers: - The total size of the pie is 100. - In
Consider a modified version of the ultimatum game discussed in class, with alternating offers: - The total size of the pie is 100. - In Round 1, Player 1 offers a split (1, 2) = (, 100 ) (The notation means that Player 1 will receive a payoff of , and Player 2 receives a payment of 100 ). - If Player 2 accepts the offer, the players receive the proposed payoffs ( and 100 , respectively), and the game ends. - If Player 2 rejects the offer, it is now her turn to make an offer. She offers a split (100 , ) (Player 1 receives 100 , Player 2 receives ). If Player 1 accepts, each player receives the proposed payoffs, and the game ends. - If Player 1 rejects the offer, the game ends, and each player receives a payoff of 40
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