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The question is on microeconomics applied to game theory (llpts) (True / false) Consider a dictator game, played by two people. One player designated as

The question is on microeconomics applied to game theory

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(llpts) (True / false) Consider a dictator game, played by two people. One player designated as the \"dictator\" chooses how much of $10 she is going to keep. The rest is kept by the other player. Suppose that the dictator game is repeated innitely in an experiment, with each player taking turns as a dictator. Standard economic theory, i.e., the one where players only care about their own payoffs, can explain the outcome where dictators always keep $5 and leave $5 for the other player each period as an equilibrium of an innitely repeated dictator games where both players play the following grim-triggerstrategy like strategy: always offer $5; if the other player offers less than $5, then never offer anything when you are the dictator (assume that discount factor 6 is such that 0

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