5. Consider a modified version of the ultimatum bargaining game. The proposer's payoff is as in the standard ultimatum game. The responder's payoff is given by y + 2(y-z), where y is the responder's monetary reward, z is the proposer's monetary take. Find and report the subgame perfect equilibrium.

1) Consider the following variant of the prisoner's dilemma with altruistic preferences. For simplicity, I'm adding 15 to the payoffs of the baseline normal form representation of the game we describe in class which results in the following: Player I\ Player 2 Cooperate Non-Cooperate Cooperate 8.8 0,15 Non Cooperate 15,0 14,14 Assume now that the players are not “selfish”; rather the preference of each player i are represented by the payoff (utility) function m; (a) + ßm; (a) where mi(a) is the payoff received by player i when the strategy profile is a, j is the other player, and ß is a given non-negative number. Player 1's payoff to the strategy profile (Cooperate, Cooperate), for example, is 8+8ß. A) Assume ß = 1. Write the normal form of the game. Is this game a prisoner's dilemma? What is the Nash equilibria of the game? B) Find the range of values of ß for which the resulting game is the prisoner's dilemma.

Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for thecar is 12 ($12,000). Bo, the dealer, is willing to sell the car as long as he receives at least 9($9,000). What is the Nash bargaining solution to this game?

Within a voluntary contribution game, the Nash equilibrium level of contribution is zero, but in experiments, it is often possible to sustain positive levels of contribution for a long period.  How might we best explain this? A) Participants are altruistic, and so value the payoff which other participants receive, benefiting (indirectly) from making a contribution. B) Participants believe that if they make a contribution, then other participants will be more likely to make a contribution. C) Participants in experiments believe that they have to make contributions in order to receive any payoff from their participation. D) Participants have experience of working in situations in which cooperation can be sustained for mutual benefit and so have internalised a social norm of cooperation

Note: The answer should be typed.

Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form accompanying game. Worker Work Shirk Manager Monitor -1,1 1,-1 Don't Monitor 1,-1 -1,1 Which of the following pairs of strategies constitutes a Nash equilibrium? Multiple Choice Manager monitors and worker shirks. Manager does not monitor and worker works. Manager monitors and worker works. O None of the answers is correct.

The ultimatum game is a game in economic experiments. The first player (the proposer) receives a sum of money and proposes a fair proposal (F - 5;5) or unfair proposal (U - 8;2). The second player (the responder) chooses to either accept (A) or reject (R) this proposal. If the second player accepts, the money is split according to the proposal. If the second player rejects, neither player receives any money. 1 A 5:5 2 F R 0:0 U A 8:2 2 1. Find the subgame perfect Nash Equilibrium using backward induction. R 0;0

Two supermarkets face the following possibilities.                       Superstore     Advertise Don’t Advertise Megastore Advertise $95, $80 $305, $55 Don’t Advertise $65, $285 $165, $115     47. A Nash equilibrium is Group of answer choices for Megastore to advertise and for Superstore to advertise. for Megastore to advertise and for Superstore not to advertise for Megastore not to advertise and for Superstore to advertise. for Megastore not to advertise and for Superstore not to advertise. There is no Nas equilibrium in this rivalry game.

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