Suppose that the proposer in the ultimatum game may not propose fractional amounts, and therefore must propose $0, $1, $2, ., or $10 (see figure below). As always, the responder must Accept (A) or Reject (R). Suppose that this game is played by two egoists who care only about their money. Which of the following statements are true? (Multiple Choice) $0 $1 $2 $3 $4/ $5 $6 $7 $8 $9 $10 ($6,$4) ($0,$0) O A. Player 2's threat to reject a low offer is not credible; player 1 anticipates this and offers nothing. O B. The Nash equilibrium is: Player 2 accepts no offers and Player 1 offers nothing. OC. The Nash equilibrium is: Player 2 accepts all offers and Player 1 offers nothing. O D. When played with real-world subjects, few people actually play the Nash strategy.
Suppose that the proposer in the ultimatum game may not propose fractional amounts, and therefore must propose $0, $1, $2, ., or $10 (see figure below). As always, the responder must Accept (A) or Reject (R). Suppose that this game is played by two egoists who care only about their money. Which of the following statements are true? (Multiple Choice) $0 $1 $2 $3 $4/ $5 $6 $7 $8 $9 $10 ($6,$4) ($0,$0) O A. Player 2's threat to reject a low offer is not credible; player 1 anticipates this and offers nothing. O B. The Nash equilibrium is: Player 2 accepts no offers and Player 1 offers nothing. OC. The Nash equilibrium is: Player 2 accepts all offers and Player 1 offers nothing. O D. When played with real-world subjects, few people actually play the Nash strategy.
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.7P
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