EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 18, Problem 7Q
To determine
Explanation for the inconsistency in the theoretical and experimental results of the ultimatum game.
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Suppose Justine and Sarah are playing the ultimatum game. Justine is the proposer, has $140 to allocate, and Sarah can accept or reject the offer. Based on repeated experiments of the ultimatum game, what combination of payouts to Justine and Sarah is most likely to occur?.
Economics
Consider the ultimatum and dictator games.
a) Briefly explain the general experimental findings
about how individuals play these games. How do
they compare with the game theoretic
predictions?
b) How do social preferences explain behavior in
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c) Real world experiences have an impact on
experimental behavior. Explain how real world
experiences could affect behavior in each of
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d) Suppose that you would like to increase the
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think of a way to to this?
e) Suppose that individuals play first a dictator
game and then an ultimatum game with the roles
reversed, i.e. the sender in the dictator game is the
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think that players will play? Explain.
you
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 of
value 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 offers
in 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)
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- In 'the dictator' game, one player (the dictator) chooses how to divide a pot of $10 between herself and another player (the recipient). The recipient does not have an opportunity to reject the proposed distribution. As such, if the dictator only cares about how much money she makes, she should keep all $10 for herself and give the recipient nothing. However, when economists conduct experiments with the dictator game, they find that dictators often offer strictly positive amounts to the recipients. Are dictators behaving irrationally in these experiments? Whether you think they are or not, your response should try to provide an explanation for the behavior.arrow_forwardQ2. The Prisoners' Dilemma: Jill Confess Remain Silent Confess Bob: 8 years Jill: 8 years Bob: Free Jill: 20 years Bob Remain Silent Bob: 20 years Jill: Free Bob: 1 year Jill: 1 year 2A: Find Nash equilibrium? 28. Is the Nash equilibrium best outcome for them? 2C. If your answer of Q2 is 'No', then why they choose an outcome which is not best for them.arrow_forwardIn 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?arrow_forward
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