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Respond to the question: Hi Need a little help with this bargain?

11/16/2000 09:51 AM by Brandon; Bargaining - Smarties

Thank you Walter! I've emailed a reply. [View full text and thread]

11/08/2000 08:45 AM by Walter;

There are 2 common interpretations to the discount factor. 1) Impatience: the value of a 1 unit of consumption today is higher than that of a unit of consuption tomorrow. This is captured by a parameter R<1 2) The game may end [View full text and thread]

11/07/2000 12:07 AM by Brandon; Thank you

Thanks for the recommendation. I'll go take a look at those pages :) I've a question though which I was hoping to get some clarification:- Why are the smarties discounted as time passes rather than being discounted backwards? I had [View full text and thread]

11/06/2000 09:15 AM by Walter;

Take a look at the book "Thinking Strategically" by Dixit and Nalebuff, pages 44-48 and chapter 11. It is very instructive. Think of the discount factor as "the size of the pie" that remains on table (or, suppose that after a period, some smarties rot, and hence the discount factor is the precentage of remaining smarties). Notice also that in your game you have a discount factor for each player. [Manage messages]

11/03/2000 10:41 AM by Brandon Poon; Hi! Need a little help with this bargaining problem :)

Player T & Player D are bargaining over 100 smarties. T gets to make the 1st move and suggest he keeps a number x. If D accepts, the game is over, if she does not, there is a 2nd round in which D suggest she keeps a number y and T [View full text and thread]