Consider the following scenarios in the Ultimatum game, viewed from the perspective of the Recipient. Assume that the Recipient is motivated by negative reciprocity and will gain $15 ofvalue from rejecting an offer that is strictly less than 50 percent of the total amount to be divided between the two players by the Proposer. Assume that the Proposer can only make offersin increments of $1.If the pot is $30, what is the minimum offer that the Responder will accept? What percent of the pie is this amount?The minimum offer that will be accepted is S. which represents percent of the pie.If the pot is $100, what is the minimum offer that the Responder will accept? What percent of the pie is this amount?The minimum offer that will be accepted is S, which represents percent of the pie. (Round answers to 2 decimal places as needed)

Ultimatum game is experimental game in which player focuses on self interest and thinks about their…

Answered: Consider the following scenarios in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Nicolaus I Bernoulli offers his friend Pierre Rémond de Montmort a game where they need to repeatedly toss a fair ducat until they get a head for the first time. The game stops then, and they count the number n of coin tosses it took to get the desired outcome, and Montmort gets 2^n ducats. Assume that Montmort's utility function is u(w)=w^0.14. How much should Montmort pay to play this game?
Jan wants to buy a house, but her friend Kan is a much tougher negotiator. They devise a plan where Kan will tell the seller of the house that she is Jan’s agent and will make all the decisions with respect to any purchase of the house. They also agree that Kan actually will have no such authority and that Jan is the only one who will make any decisions relating to purchasing the house. They meet with the seller, and Kan says that she is Jan’s agent while Jan says nothing. Has an agency been created? Discuss in details the pros and cons of this case.
Consider the game in the image attached below, which is infinitely repeated at t = 1, 2, ... Both players discount the future at rate: delta E (0, 1). The stage game is in the image attached. "Grim Trigger" strategies: Describe the "Grim Trigger" strategy profile of this game. Draw the finite automata representation of this strategy profile. Find the lowest value of delta for this strategy profile to form a subgame perfect equilibrium.
A buyer and seller trade with each other for an infinite number of periods. Both parties have a discount factor of d, where 0 < d < 1. In each period both parties can play trust (T) or to play selfish (S). If both the buyer and seller play T the payoffs are 4 to each player. If both parties plays the payoffs are 3 to each player. If one player plays S and the other T, the payoffs are 6 to the player who opted for 5 and 1 to the party that opted for T. Consider the following trigger strategy. In the first period play T. In any subsequent period, play T if in every previous period the outcome was (T, T), if not play S. What is the minimum d required for this trigger strategy to be subgame perfect equilibrium? O None of the other answers are correct. O 1/4 O 1/3 O 3/4
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Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for thecar is 12 ($12,000). Bo, the dealer, is willing to sell the car as long as he receives at least 9($9,000). What is the Nash bargaining solution to this game?
Why do sellers generally prefer a Vickrey auction to a regular sealed bid if sellers don’t receive the highest bid in the Vickrey auction? Sellers only have to sell their item if the bid is the highest-price bid. The second-highest bid in a Vickrey auction is generally higher than the highest bid in a regular sealed-bid auction. The second-highest bid is about the same in both auctions. Sellers prefer the final price is not revealed to all bidders. Sellers would never prefer Vickrey auctions.
Within a voluntary contribution game, the Nash equilibrium level of contribution is zero, but in experiments, it is often possible to sustain positive levels of contribution for a long period. How might we best explain this? A) Participants are altruistic, and so value the payoff which other participants receive, benefiting (indirectly) from making a contribution. B) Participants believe that if they make a contribution, then other participants will be more likely to make a contribution. C) Participants in experiments believe that they have to make contributions in order to receive any payoff from their participation. D) Participants have experience of working in situations in which cooperation can be sustained for mutual benefit and so have internalised a social norm of cooperation
Consider the following bargaining game with three rounds: Players 1 and 2 divide a pie of size 1. Both players have a common discount factor, δ = 0.9. In the first round (player 1 proposes): player 1 proposes x ∈ [0, 1]. If player 2 accepts the offer, then player 1 gets x, and player 2 gets 1−x. If player 2 rejects the offer, the game proceeds to round 2. In the second round (player 2 proposes): player 2 proposes y ∈ [0, 1]. If player 1 accepts the offer, then player 1 gets δy, and player 2 gets δ − δy. If player 2 rejects the offer, the game proceeds to round 3, the final round. In the third and final round (player 1 proposes): player 1 proposes z ∈ [0, 1]. If player 2 accepts the offer, player 1 gets δ2z, and player 2 gets δ2 − δ2z. If player 2 rejects the offer, everyone gets 0. 1. What would be the SPNE of the game?
Victoria founded a start-up several years ago, together with her Macedonian friends. At first, she was fairly poor and therefore very afraid of taking risks. Any negative shock could send the company into bankruptcy. Nowadays her business is thriving, stretching across several markets from Europe to Asia. Victoria no longer worries about taking monetary risks. In fact she enjoys a good gamble over horse races from time to time. How would you draw Victoria's utility function in a way that describes her changing taste for risk as her wealth increased? Please draw a graph and comment. Please do fast ASAP fast
Suppose that Alex wants to purchase a boat from Rosette. Alex is willing to pay up to $18,000, while Rosette is not willing to accept any offer below $15,000. Assume that there are a finite number of negotiating rounds. 1.If the discount factors for Rosette and Alex are δR = 0.05 and δA = 0.05, respectively, how much should Alex offer for the boat? 2.Suppose that Rosette’s discount factor is δR = 0.20, and Alex’s discount factor is δA =0.15. 3.How much should Alex offer for the boat? How does this offer differ from your r to part a, and why?
In a standard economic model, we generally assume the individual only cares about their own payoff. So, for example, utility of individual i is given by u = pi, where pi is the individual’s payoff. Suppose the individual is playing a dictator game with another partner j. How would you modify the utility function to explain the non-zero allocations to the partner that are typically observed?

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