Consider the following two-player game. Player 1 moves first and chooses either Top or Bottom. Player 2 gets to see Player 1's choices and then responds with either Accept or Reject. If Player 1 chooses Top and Player 2 chooses Accept, then Player 1 gets $8 and Player 2 gets $2. If Player 1 chooses Top and Player 2 chooses Reject, then they both get $0. If Player 1 chooses Bottom and Player 2 chooses Accept, then Player 1 gets $A and Player 2 gets $B. If Player 1 chooses Top and Player 2 chooses Reject, then they both get $0. (i) Draw the game tree to depict this game. (ii) How do you think the results will differ if both A=B=$5 as opposed to A=$10 and B=$0. (iii) Suppose A=$10 and B=$1, what would be the outcome if this game is set up as an impunity game rather than an ultimatum game? (iv) Suppose A=B=$5, what would be the outcome of the game if this game is set up as impunity game as opposed to an ultimatum game.

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The Answer of Consider the following two-player game. Player 1 moves first and chooses either Top or Bottom. Player 2 gets to see Player 1's choices and then responds with either Accept or Reject. If Player 1 chooses Top and Player 2 chooses Accept, then Player 1 gets $8 and Player 2 gets $2. If Player 1 chooses Top and Player 2 chooses Reject, then they both get $0. If Player 1 chooses Bottom and Player 2 chooses Accept, then Player 1 gets $A and Player 2 gets $B. If Player 1 chooses Top and Player 2 chooses Reject, then they both get $0. (i) Draw the game tree to depict this game. (ii) How do you think the results will differ if both A=B=$5 as opposed to A=$10 and B=$0. (iii) Suppose A=$10 and B=$1, what would be the outcome if this game is set up as an impunity game rather than an ultimatum game? (iv) Suppose A=B=$5, what would be the outcome of the game if this game is set up as impunity game as opposed to an ultimatum game.

Consider the Following Two-Player Game