The document below shows the beta and alpha. Consider the following ultimatum game. In Stage 1, the proposer chooses a shareof $1 to offer to the responder. The sharecan be any number between 0 and 1 (including 0 and 1). After observing the proposer's decision, the responder may choose to accept or reject. If the responder accepts, the proposer keepsand the responder receives.If the responder rejects, both players receive 0.Assume that the responder always accepts when she is indifferent between accepting and rejecting.

Suppose that both the proposer (Player) and the responder (Player) exhibit inequity aversion as specified in the model of Fehr and Schmidt (1999), withand(andare the parameters for player;andare the parameters for player). Suppose these preferences are commonly known to both players. Use backward induction to solve the subgame perfect Nash equilibrium.

Consider the following ultimatum game. In Stage 1, the proposer chooses a share 3 of $1 to offer to the responder. The share 3 can be any number between 0 and 1 (including 0 and 1). After observing the proposer's decision, the responder may choose to accept or reject. If the responder accepts, the proposer keeps (1 s) x $1 and the responder receives 3 x $1. If the responder rejects, both players receive 0. Assume that the responder always accepts when she is indifferent between accepting and rejecting. Suppose that both the proposer (Player P) and the responder (Player R) exhibit inequity aversion as specied in the model of Fehr and Schmidt (1999), with up = R = 3 and 3,0 = R = 0.3 (up and 3;: are the parameters for player P; (1;; and 6,; are thje parameters for player R). Suppose these preferences are commonly known to both players. Use backward induction to solve the subgame perfect Nash equilibrium