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October 13, 2020
2,000-word essay
October 13, 2020
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[Dictator game and impunity game] The “dictator game” differs from the ultimatum game only in that person 2 does not have the option to reject person…

[Dictator game and impunity game] The ”dictator game” differs from the ultimatum game only in that person 2 does not have the option to reject person 1’s offer (and thus has no strategic role in the game). The “impunity game” differs from the ultimatum game only in that person 1’s payoff when person 2 rejects any offer x is c − x, rather than 0. (The game is named for the fact that person 2 is unable to “punish” person 1 for making a low offer.) Find the subgame perfect equilibria of each game.

 

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