Consider the Same Ultimatum Game as in the Previous Questions

question 23

Multiple Choice

Consider the same ultimatum game as in the previous questions but consider yet new preferences reflecting envy. In particular,now assume players get 1 util per dollar earned. That is all for the player who earns at least as much as the other. The player who earns strictly less than the other loses 1 util for each dollar difference. Which of the following is an offer that arises in a subgame-perfect equilibrium with these preferences?

• A)1.
• B)2.
• C)4.
• D)5.

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Definitions:

Useful Output

The amount of productive work, goods, or services an organization, process, or device generates during a given period.

Sales Journal

A special journal that records all sales of merchandise on account.

General Ledger

The primary accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and transactions.

Reference Column

An additional column in financial documents used to include explanatory notes or cross-references.