Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 17, Problem 8P
To determine
Equilibrium in a game where the “responder” becomes the first player in the ultimatum game.
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In the Ultimatum Game, player 1 is given some money (e.g. $10; this is public knowledge), and may give some or all of this to player 2. In turn, player 2 may accept player 1’s offer, in which case the game is over; or player 2 may reject player 1’s offer, in which case neither player gets any money, and the game is over.
a. If you are player 2 and strictly rational, explain why you would accept any positive offer from player 1.
b. In reality, many players reject offers from player 1 that are significantly below 50%. Why
Two players play the Ultimatum Game, in which they are to split $20. A purely rational agent would only reject an offer of …
Group of answer choices...
-$20
-$19
-$1
-$0
-$10
Suppose Justine and Sarah are playing the ultimatum game. Justine is the proposer, has $140 to allocate, and Sarah can accept or reject the offer. Based on repeated experiments of the ultimatum game, what combination of payouts to Justine and Sarah is most likely to occur?.
Chapter 17 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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