Consider a Variant aF the uitimatum qame we Studicd incllassin which playcrs have Fairness considerations. The timingOF the qame is usual. First , Player 1 propase the split(100 -X", x) OF a hundred dallars to player 2,WhereX E [0,100]. Player 2 observes split & decides whether to accept(in which case they recieve Money accor ding t1 proposed Split)or reject (in Which case they both get žero dollars).Butnow player i's Utility equals to her monetary Vtility minusthe disutility From unFairneas proportional to the differenein Monetary OutCOMeS . That is, given a final Split (m. ,m.) Ietu, (m. ,m.) = m, -B. (m, - m2)U, (m. ,m,) = m, - P. (m, -m.)Where Pi,ßz are parametens oF the game indicating how stronglyPlayers care a bout Fairness. Note that the case weConsidered corres ponds to B, = P2 = 0(a) represent this game in Exten siye formb) Describe the Gets of Strategies OF each player

Introduction Ultimatum game described human unwillingness about injustice. Fairness can be studied…

Consider a Variant oF the utimatum qame we Studicd in class IN which playcrs have Fairness considerations . The timing OF the qame is vsual. First , Player 1 propasar the split (100 -x, x) OF a hundred dollars to Player 2, Where XE [0,100]. Player 2 observes split & decides whtther to accept (in which case they recieve Money according ti proposed Split) or reject (in Which case they both get żero dollars).But now player i's vtility equals to her monetary Vility minus the disutility From unFairneus proportion al to the diFferene in Monetary OtcCOMES . That is, given a final Split (m. ,m.) let u, (m. ,m.) = m, -B. (m, - m2)* -B. (m, - ma)* = M, U. (m. ,m,) = m, - P. (m. -m.) where P..f2 are parametens of the indicating haw strongly Players care a bout Fairness. Note that the case we considered corres pands to game o P, = P2 = 0 %3D (a) represent this game in Exten sive Form (b) Describe the sets of Strateqies oF each player

Consider a Variant oF the utimatum qame we Studicd in class IN which playcrs have Fairness considerations . The timing OF the qame is vsual. First , Player 1 propasar the split (100 -x, x) OF a hundred dollars to Player 2, Where XE [0,100]. Player 2 observes split & decides whtther to accept (in which case they recieve Money according ti proposed Split) or reject (in Which case they both get żero dollars).But now player i's vtility equals to her monetary Vility minus the disutility From unFairneus proportion al to the diFferene in Monetary OtcCOMES . That is, given a final Split (m. ,m.) let u, (m. ,m.) = m, -B. (m, - m2)* -B. (m, - ma)* = M, U. (m. ,m,) = m, - P. (m. -m.) where P..f2 are parametens of the indicating haw strongly Players care a bout Fairness. Note that the case we considered corres pands to game o P, = P2 = 0 %3D (a) represent this game in Exten sive Form (b) Describe the sets of Strateqies oF each player

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.7P

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