economic homework

1. Let x be the amount that Player A asks for when making the first offer in an alternating-offers bargaining game with impatience. The initial amount is $1. Suppose that each player has BATNA = $0 and the impatience is δ = 0.5. What is x? a. x = 0.4 b. x = 0.5 c. x = 0.6 d. x = 2/3 e. None of the above 1. Consider the Ultimatum game. There are two players: one is Proposer, the other is Responder. Proposer proposes how to divide $5. She can offer $0, $1, $2, $3, $4, or $5 to the Responder. Then, the Responder has __________ strategies. 1. Consider the Ultimatum game. There are two players: one is Proposer, the other is Responder. Proposer proposes how to divide $5. She can offer $0, $1, $2, $3, $4, or $5 to the Responder. Then, there are __________ rollback equilibria in this game. a. 1 b. 2 c. 3 d. 5 e. None of the above 1. Ali and Baba are bargaining to split a total that starts out at $10. Ali makes the first offer, stating how $10 will be divided between them. If Baba accepts this offer, the game is over. If Baba rejects it, three dollars are withdrawn from the total, and so it is now only $7. Then Baba gets the second turn to make an offer of a division. If the offer is accepted, the bargain is complete and each player gets an amount determined by the offer. If the offer is declined, the $7 shrinks to $4 and Ali then gets a turn to make an offer. Again, the bargain is complete if Baba accepts and the division is made according to the terms of the offer. If Baba declines the offer, the $4 shrinks to $1 and Baba then gets a turn to make a final offer. If Ali accepts, the division is made according to Baba’s offer, but if Ali declines, the sum available shrinks to zero and each player gets his/her BATNA. Ali’s BATNA is $2.25 and Baba’s BATNA is $3.50. What is the rollback equilibrium outcome of the game? a. Ali gets $5.50 and Baba gets $4.50 b. Ali gets $5.25 and Baba gets $4.75 c. Ali gets $5.00 and Baba gets $5.00 d. Ali gets $4.75 and Baba gets $5.25 e. Ali gets $4.50 and Baba gets $5.50 1. Consider the following game: The following is the Rollback equilibrium in this game: a. (Offer, R) b. (Offer, A) c. (Out, R) d. (Out, A)