4. Consider the following grenade game. First, player 1 chooses between giving player 2 $500 and giving player 2 nothing. Second, player 2 observes player 1's move and then chooses whether or not to explode a grenade that will kill both players. What is the subgame-perfect Nash equilibria?

4. Consider the following grenade game. First, player 1 chooses between giving player 2 $500 and giving player 2 nothing. Second, player 2 observes player 1's move and then chooses whether or not to explode a grenade that will kill both players. What is the subgame-perfect Nash equilibria?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The options for the last 3 fill-in-the-blanks are "Up" or "Down." Thank you!
Suppose that, in an ultimatum game, the proposer may not propose less than $1 nor fractional amounts, and therefore must propose $1, $2, …, or $10 (see image attached below). The responder must Accept (A) or Reject (R). Suppose, first, that this game is played by two egoists, for whom u(x,y)=x. Find all subgame-perfect equilibria in this game. Suppose, second, that this game is played by two altruists, for whom u(x,y) = ⅔(x)1/2 + ⅓(y)1/2. Find all subgame-perfect equilibria in this game.
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