Re: DSE 2013 Doubts

Posted by phelps.phan on May 30, 2014; 7:28am
URL: http://discussion-forum.276.s1.nabble.com/DSE-2013-Doubts-tp7590991p7591079.html

Q 28: Given player 1's proposal is rejected. 2 will propose such that he is better off than (3,3,3) and 3 will accept if its better than (3,3,3).
Option d is ruled out. for 2 it is not better off than (3,3,3) while he has an advantage of proposing.
Also he would not choose Option c since player 3 might reject it since player 3 can still get the same utility from (3,3,3) after rejecting.
Player 3 would accept any of option a and b. So player 2 will try to maximize his utility selecting a.

Q 29: Option d: ruled out as player 2 can reject it without any loss and player 3 will definitely reject it.
Option c: might be accepted but he gets a utility of 3.
Option a: its rejected by player 2. It can be rejected by player 3 too as we know if player 1's proposal is rejected, he would accept the proposal (0,5,4). Player 3's utility is same as of (5,0,4). So player 1 would not take the risk for player 3 to reject his proposal.
If he proposes (4,0,5) player 3 cannot reject it as he is better off than (0,5,4).
Also player 1 would prefer (4,0,5) to (3,6,0). So answer b.