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Consider the ultimatum game in LN 8. Prove that the following strategy profile is a Nash equilibrium: For any 0 < x 1, player 1
Consider the ultimatum game in LN 8. Prove that the following strategy profile is a Nash equilibrium: For any 0 < x 1, player 1 offers x to player 2, player 2 accepts any offer greater than or equal to x and rejects any offer smaller than x. Is this strategy profile a subgame perfect equilibrium as well? Briefly explain why.
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