Question

3. Dictator and Ultimatum Games with Fehr-Schmidt Preferences [35 pts Now let that the two utility functions be given by, (a) 10 pts Suppose that the two agents play a dictator game in which player A is given an endowment of 100 and may transfer any amount s 10,100) to player B. The material payoffs are then given by (zA,TB) = (100-s, s). For every ßA E [0.1 ),compute Player A's optimal strategy. (b) 10 pts Now suppose that the two agents are playing an ultimatum game with an endowment of 100. Write down the set of players, the pure strategy space of each player and the payoff functions (c) 6 pts Calculate B's best response to every offer s e [0, 100) (d) 9 pts How does the subgame perfect equilibrium of the ultimatum game depend on aB and BA?

game theory experimental economics help please!

Answer 1

Argoe Giyen thal 100-S) -60 Assuve hat FAf Assume that A0 ): (100 -s)-60 (loo-s)-60 Assume 2

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