Consider a Variant aF the uitimatum qame we Studicd incllassin which playcrs have Fairness considerations. The timingOF the qame is usual. First , Player 1 propase the split(100 -X", x) OF a hundred dallars to player 2,WhereX E [0,100]. Player 2 observes split & decides whether to accept(in which case they recieve Money accor ding t1 proposed Split)or reject (in Which case they both get žero dollars).Butnow player i's Utility equals to her monetary Vtility minusthe disutility From unFairneas proportional to the differenein Monetary OutCOMeS . That is, given a final Split (m. ,m.) Ietu, (m. ,m.) = m, -B. (m, - m2)U, (m. ,m,) = m, - P. (m, -m.)Where Pi,ßz are parametens oF the game indicating how stronglyPlayers care a bout Fairness. Note that the case weConsidered corres ponds to B, = P2 = 0(a) represent this game in Exten siye formb) Describe the Gets of Strategies OF each player

Consider a Variant oF the utimatum qame we Studicd in class IN which playcrs have Fairness considerations . The timing OF the qame is vsual. First , Player 1 propasar the split (100 -x, x) OF a hundred dollars to Player 2, Where XE [0,100]. Player 2 observes split & decides whtther to accept (in which case they recieve Money according ti proposed Split) or reject (in Which case they both get żero dollars).But now player i's vtility equals to her monetary Vility minus the disutility From unFairneus proportion al to the diFferene in Monetary OtcCOMES . That is, given a final Split (m. ,m.) let u, (m. ,m.) = m, -B. (m, - m2)* -B. (m, - ma)* = M, U. (m. ,m,) = m, - P. (m. -m.) where P..f2 are parametens of the indicating haw strongly Players care a bout Fairness. Note that the case we considered corres pands to game o P, = P2 = 0 %3D (a) represent this game in Exten sive Form (b) Describe the sets of Strateqies oF each player

Consider a Variant oF the utimatum qame we Studicd in class IN which playcrs have Fairness considerations . The timing OF the qame is vsual. First , Player 1 propasar the split (100 -x, x) OF a hundred dollars to Player 2, Where XE [0,100]. Player 2 observes split & decides whtther to accept (in which case they recieve Money according ti proposed Split) or reject (in Which case they both get żero dollars).But now player i's vtility equals to her monetary Vility minus the disutility From unFairneus proportion al to the diFferene in Monetary OtcCOMES . That is, given a final Split (m. ,m.) let u, (m. ,m.) = m, -B. (m, - m2)* -B. (m, - ma)* = M, U. (m. ,m,) = m, - P. (m. -m.) where P..f2 are parametens of the indicating haw strongly Players care a bout Fairness. Note that the case we considered corres pands to game o P, = P2 = 0 %3D (a) represent this game in Exten sive Form (b) Describe the sets of Strateqies oF each player

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider a Variant aF the uitimatum qame we Studicd incllass
in which playcrs have Fairness considerations. The timing
OF the qame is usual. First , Player 1 propase the split
(100 -X", x) OF a hundred dallars to player 2,Where
X E [0,100]. Player 2 observes split & decides whether to accept
(in which case they recieve Money accor ding t1 proposed Split)
or reject (in Which case they both get žero dollars).But
now player i's Utility equals to her monetary Vtility minus
the disutility From unFairneas proportional to the differene
in Monetary OutCOMeS . That is, given a final Split (m. ,m.) Iet
u, (m. ,m.) = m, -B. (m, - m2)
U, (m. ,m,) = m, - P. (m, -m.)
Where Pi,ßz are parametens oF the game indicating how strongly
Players care a bout Fairness. Note that the case we
Considered corres ponds to B, = P2 = 0
(a) represent this game in Exten siye form
b) Describe the Gets of Strategies OF each player

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