UGBA
GT0-Trust

# GT0-Trust - The Money Pot Trust and Ultimatum Games UGBA...

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1 1 Trust and Ultimatum Games UGBA 143: Game Theory and Business Decisions 2 The Money Pot I HAVE A MONEY POT. FOR EVERY DOLLAR THAT I LEAVE IN IT, THERE WILL BE THREE DOLLARS THE NEXT MORNING. PAYDAY. NOW I HAVE TEN BUCKS. SO IT’S A DEAL? 3 The Game Dilbert chooses \$ x (between \$0 and \$10) to give Wally gets \$3 x in his Money Pot the next morning Wally chooses \$ y (between \$0 and \$3 x ) to return Payoffs: – Dilbert gets \$(10 – x + y ) – Wally gets \$(3 x y ) You will play be assigned a role randomly There are twelve decision rounds Randomly matched in pairs Later: Fixed partners 4 The Ultimatum Game I’ll give you an ultimatum. Let’s split it my way.
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Unformatted text preview: Shall I take the offer? Or I can just crush it under my foot… 5 The Game Let’s say the donut is worth \$10 Homer proposes an ultimatum: split the donut by offering x to Bart and keeping (10 – x ) Bart responds by… accepting the offer, crushing the donut, or “crushing it partially” Bart chooses some number k between 0 and 1 Payoffs: – Bart gets: k x – Homer gets: k (10 – x ) 6 The Game You will play be assigned a role randomly There are twelve decision rounds Randomly matched in pairs A slight variation: Bart must choose either accept ( k = 1) or reject ( k = 0)...
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• Spring '08
• XuanmingSu
• Game Theory, bart, Ultimatum game, ultimatum games, Ultimatum

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