Consider an ultimatum Bargaining Game,in Which Two Players Are Asked

question 7

Essay

Consider an ultimatum bargaining game,in which two players are asked to divide a fixed sum of money.The first person is given the role of Proposer.She must make a proposal to a second player,called the Responder,regarding how to split the sum between them.If the Responder accepts,the players receive the agreed amounts,but if the Responder rejects the proposal,neither player gets anything.
What would the results look like if both players had strictly neoclassical preferences? When this experiment is conducted in practice to do people exhibit neoclassical preferences? Explain.

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