EXERCISE 183.3 (Dictator game and impunity game) The "dictator game" differs from the ultimatum game only in that person 2 does not have the option to reject person 1's offer (and thus has no strategic role in the game). The "impunity game" differs from the ultimatum game only in that person 1's payoff when person 2 rejects any offer x is c-x, rather than 0. (The game is named for the fact that person 2 is unable to "punish" person 1 for making a low offer.) Find the subgame perfect equilibria of each game.

EXERCISE 183.3 (Dictator game and impunity game) The "dictator game" differs from the ultimatum game only in that person 2 does not have the option to reject person 1's offer (and thus has no strategic role in the game). The "impunity game" differs from the ultimatum game only in that person 1's payoff when person 2 rejects any offer x is c-x, rather than 0. (The game is named for the fact that person 2 is unable to "punish" person 1 for making a low offer.) Find the subgame perfect equilibria of each game.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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