Draw a game tree that represents the ultimatum game in which the proposer is a first mover

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Draw a game tree that represents the ultimatum game in which the proposer is a first mover who decides how much to offer a responder and the responder then decides to accept or reject the offer. The total amount available is $ 50 if agreement is reached, but both players get nothing if the responder rejects the offer. Offers must be in whole dollars. What is the subgame-perfect Nash equilibrium? What would you expect to happen in practice?

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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