Question

Two players have the opportunity to participate in a gamble with two outcomes, as the players' utility functions for the money outcomes are as follows. Determine the difference in the amounts that you must offer to two players:

a. Two players
b. More than two players
c. Not enough information
d. None of the above

Answer 1

The ultimatum game involves two players who have to decide on the amount of money to offer and accept. Players are not entirely self-interested and may reject unfair offers. Various factors can influence the offers and acceptance in the game.

Step-by-step explanation:

The ultimatum game involves two players, Player A and Player B, who are given a sum of money (e.g. $10). Player A has to decide how much money to offer to Player B, who can either accept or reject the offer. If Player B accepts, both players keep their share of the money, but if Player B rejects, neither player keeps any money. In a rational and self-interested scenario, Player A would make a small offer, such as $1, expecting Player B to reluctantly accept. However, in reality, players are not entirely self-interested. They may reject unfair offers, seeking to maintain fairness and punish those who violate it.

The amount that Player A offers and the likelihood of offers being accepted can vary based on factors such as the players' relationship, the total prize amount, and strategic considerations. There isn't enough information given to determine the specific difference in amounts that should be offered to two players or more than two players.