You play the following bargaining game. Player A moves first and
makes Player B an offer for the division of $1000. (For example,
Player A could suggest that she take $600 and Player B take
$400.) Player B can accept or reject the offer. If he rejects
it, the amount of money available drops to $900, and he then
makes an offer for the division of this amount. If Player A rejects
this offer, the amount of money drops to $700 and Player A makes
an offer for its division. If Player B rejects this offer, the
amount of money drops to $0 and player A keeps the $700. Both
players are rational, fully informed, and want to maximize their
payoffs. Which player will do best in this game?
Assume that monetary divisions must take the form of dollars
(rather than cents or smaller denominations) and, in each round,
a player will offer at least $1.
The player that will do best in this game is _____ because when
following his optimal strategy he should receive a payoff of
$_____. (Enter a numeric response using an integer.)
You play the following bargaining game. Player A moves first and makes Player B an offer...
Consider the following bargaining game in which two players are trying to share a cake of size 1. Player 1 offers ri e [o, 1jand player 2 either accepts (Y) of rejects (N): If player 2 accepts player 1 receives a payoff of ri and player 2 receives 1-1. If player 2 rejects, then player 2 moves again to offer 72 [0, 1] to which player 1 responds by either accepting (Y) or rejecting (N): If player 1 accepts player...
Problem 1. Ultimatum Game with Inequality Aversion Players 1 and 2 are in an ultimatum game and will divide a particular good. 1-1. . Playe r l offers a division ( r, y) with ® and y nonnegative and If Player 2 accepts this offer then Player 1 will receive the fraction r of the good and Player 2 will receive the fraction y . If Player 2 rejects the offer, then both players receive zero. . The value a...
1. Consider a firm and a union bargaining over how to split the firm’s revenue (which we assume is $100). The firm first makes an offer of an amount it will give the union (which goes to the workers as wages). Assume the firm has to choose the amount in multiples of 50. After the firm has made its offer, the union chooses whether to accept or reject. If it accepts, the revenue is divided accordingly; assume payoffs of each...
Problem 1. Ultimatum Game with Inequality Aversion Players 1 and 2 are in an ultimatum game and will divide a particular good . Player 1 offers a division (z,y) with x and y u .aegative and x + y-1. . If Player 2 accepts this offer then Player 1 will receive the fraction z of the good and Player 2 will receive the fraction y. If Player 2 rejects the offer, then bpth players receive zero . The value r...
Consider a sequential move game with two players. If the player who moves first has two or more strategies that offer him the same payoff, which one will he choose?
(3) [Dutta, Ch 2 Exercise 2.5 and 2.10 Consider the following "divide the dollar" game. Two player Pi and Pg decides how to split a dollar between themselves. Players move sequentially. First, Ps moves. P1 can make any offer to P2 in increments of 25 cents; that is P can offer $0.00, S0.25, $0.50, S0.75, or $1.00. Observing Pt's offer, F2 erving Pi's offer, P decides whether to accept the offer or to reject it. If P2 accepts the offer,...
First part: Consider the following two-player game. The players simultaneously and independently announce an integer number between 1 and 100, and each player's payoff is the product of the two numbers announced. (a) Describe the best responses of this game. How many Nash equilibria does the game have? Explain. (b) Now, consider the following variation of the game: first, Player 1 can choose either to "Stop" or "Con- tinue". If she chooses "Stop", then the game ends with the pair...
2. Two players are bargaining, just as in the Rubinstein's alternating offers model studied in class, over the division of a cake of size 1. There are two differences from the standard model: first, there is no discounting. Second, while an acceptance guarantees implementation of the going proposal, following every rejection there is an exogenous probability p > 0 that the game will completely break down. If that happens, each player gets gets 0 <b < 1/2. If not, the...
Amy and Beth have to bargain about how to divide R250. Amy moves first, making an offer of some portion of the R250 to Beth. Beth then chooses to accept or reject the offered amount. If Beth accepts, the money is divided according to the proposal. If Beth rejects the offer, the amount is reduced by R50, so that there is R200 left, and then Beth gets a turn, making an offer to Amy. If Beth’s offer is accepted, the...
2. Consider the following sequential game. Player A can choose between two tasks, TI and T2. After having observed the choice of A, Player B chooses between two projects P1 or P2. The payoffs are as follows: If A chooses TI and B chooses Pl the payoffs are (12.8), where the first payoff is for A and the second for B; if A chooses TI and B opts for P2 the payoffs are (20,7); if A chooses T2 and B...