Mathematics, 21.12.2019 06:31 isabua
Consider the following experiment where $100 is handed to robert and he is given the task to split the amount of money between robert and chelsea any way he wants. then chelsea has the option to accept the deal and take the money offered, or to refuse in which case both go empty-handed. in most experiments robert will propose a more or less fair deal, say 60-40 and chelsea will accept. if robert proposes a bad deal, like say 85-15 then often this deal will be rejected even though chelsea would be better off accepting it and taking any money rather than having nothing. let us construct a simple game which captures the essence of this relation. robert has two option, offer a fair split, say 60-40, or offer a unequal split, 85-15. chelsea has also two options, accepting any offer or accepting only the fair offer. write down the payoff matrix for the game and compute the nash equilbria.
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Consider the following experiment where $100 is handed to robert and he is given the task to split t...
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