Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 22, Problem 6CQQ
To determine
The ultimatum game and if people care on fairness.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The primary research finding from studies of the “Ultimatum Game” is that when most people make economic decisions they … (choose one)
-optimize.
-consider the issue of fairness.
-meliorate.
-apply the availability heuristic.
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?.
Two players play the Ultimatum Game, in which they are to split $20. A purely rational agent would only reject an offer of …
Group of answer choices...
-$20
-$19
-$1
-$0
-$10
Chapter 22 Solutions
Principles of Microeconomics (MindTap Course List)
Knowledge Booster
Similar questions
- The prisoner illustrates that rational, self-interested individuals will natuarally avoid the Nash equilibrium, because it is worse for both of them, true or false and why ?arrow_forwardthere are 4,000 people that commute into a city each day. There is a local road that takes 30 minutes regardless of traffic. There is also a highways that takes 5 minutes when there is no traffic but where each additional driver adds .01 minute. a) Find the Nash Equilibria b) How many drivers should use the local road to maximize the societal benefit?arrow_forwardConfused on what answer is best for the last part a. compartmentalizing b. the ultimatum game c. the endowment effect d. framingarrow_forward
- You have just played rock, paper, scissors with your friend. You chose scissors and he chose paper, so you won. Is this a Nash equilibrium? Explain why or why not.arrow_forwardSee the extensive form game in the image attached (the payoffs of player 1 are written on top and the payoffs of player 2 are on the bottom). a) Write this game in normal form (a player's strategy is a complete contingent plan that tells them what to play at each of their information sets) (b) Find all the Nash equilibria of the normal form game from part (a)arrow_forwardIn the sequential games such as the sequential Battle of the Sexes, why does the Nash equilibrium allow for outcomes with noncredible threats?arrow_forward
- Husband and wife want to spend Friday evening at cinema. They can watch the same movie, or different ones. They choose between two movies: “Heroes of War” and “Loving Stranger”. If they go to the same movie, they both feel satisfaction: in the case they watch “Heroes of War” husband’s satisfaction is higher, but in case they watch “Loving Stranger” wife’s satisfaction is higher. If they decide to watch different movies they feel no satisfaction at all. Help them to make the best decision (in terms of game theory – find Nash equilibrium).arrow_forwardIf you take a maximin strategy A. you are ensuring that the other player gets the worst possible outcome. B. you are irrational according to economic definition. C. then both players are doing the best they can given the payoffs in the game. D. you are getting the best possible outcome given that the other player does the thing that's worst for you.arrow_forwardIn the following 3-player game, the payoffs represent the number of years in jail. The equilibrium is ________ Group of answer choices Eric and Ned denies. Eric and Tim confess, but Ned denies. Eric confesses, Ned and Tim deny. Eric and Time deny, but Ned confessesarrow_forward
- Roger and Rafael play a game with the following rules. Roger is given $250 to divide between himself and Rafael. Rafael does not get to choose but he can reject Roger’s offer if he does not like it. If Rafael rejects, both get nothing. If Rafael accepts, both get the split that Roger decided. a. What is this game called? b. Find all Nash equilibria for this game. c. When this game is played in the real world, do the predictions in part 1b materialize? Why/why not? d. Are all Nash equilibria in part 1b Pareto Optimal? Explainarrow_forwardIn dynamic game theory, a situation where a player is using non-credible threat is an examples of subgame perfect Nash equilibrium, explain why or why not?arrow_forwardThe chicken game has often been used to model crises. Recall that in this game, the two players drive straight at each other. They can choose to swerve or keep going straight. If one swerves, and the other goes straight, assume that the one that swerves gets -10 utility and the one that goes straight gets 10 utility, since the one that swerves is deemed the loser. If both swerve, both get 0 utility. If both go straight, they crash and get -50 utility. Assume both players have a discount rate of 0.9 Draw the stage game of date night List all pure strategy Nash equilibria of the single stage game Consider an infinite horizon version of Chicken. Can you get an SPNE in which the both players swerve using a grim trigger type strategy? Consider the following strategies: both players swerve, as long as neither ever went straight. If one player ever plays straight, in all subsequent rounds the player that swerved goes straight and the player that went straight swerves. Can you think…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
