Q1) (4 pts) Derive the unique subgame perfect Nash equilibrium payoffs for two
agents who have different discount factors (take the discount factor of player 1 as
0.8 and the discount factor of player 2 as 0.9) in a five-period alternating offers
bargaining game. Assume that player 1 is the first mover.
Q2) (4 pts) Summarize and relate the results of Anbarcı and Feltovich (2014) "How
fully do people exploit their bargaining position? The effects of bargaining
institution and the 50-50 norm" to the model presented in Karagözoğlu, Keskin, and
Özcan-Tok (2015) "Between Anchors and Aspirations: A New Family of Bargaining
Solutions".
Q3) (2 pts) Show (can be mathematically or geometrically) that in a cooperative
bargaining problem with two agents and a linear bargaining frontier, the Gupta-Livne
solution and the tempered aspirations solution coincide.
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