17. backward induction
ultimatums and bargaining
take it or leave it offers.
Two players. Split a dollar. (s,1s) offer to 2.
if accepts get (s,1s). Otherwise zero for both.
Does backward induction permit (.99, .01),
IN splitting the dollar
· Why do we see a failure of backwards
i d ti ? ( thi h i ti )induction? (see this happen in practice)
want to be fair
Two period game. "Shrinking pie" time
of making the decision enters in
Dollar on the table.
Make an offerMake an offer