Diego Maradona was one of the greatest soccer players to play the game. This substack goes into how Maradona played the penalty kick game. But there is also a video where Maradona describes his strategy. https://twelveyards.substack.com/p/maradonas-penalty-legacy
Write down the dynamic game that Maradona claims he is playing in the video.
Consider the problem in (1), which are the Nash equilibrium of the game?
Consider the game from Question 1.
a. Draw a game tree to represent the game.
b. Determine the subgame perfect Nash equilibrium of the game.
Consider the Rubenstein game. The code for the game is below. x is the offer to the other party, V_A is the amount of stuff being negotiated over, v_N is value to the other party of not reaching an agreement, and beta is the discount rate of the other party.
offer <- function(x, V_A, v_N, beta) {
return(v_N + beta*x*V_A)
}
T <- 250
beta_odd <- 0.99
beta_even <- 0.98
V_A <- 1
v_EN <- 0
v_ON <- 0.002
odd_offers <- rep(NA, T)
even_offers <- rep(NA, T)
odd_offer_old <- 0
for (i in 1:T) {
even_offer_old <- offer(1 - odd_offer_old, V_A, v_ON, beta_odd)
odd_offer_old <- offer(1 - even_offer_old, V_A, v_EN, beta_even)
odd_offers[i] <- odd_offer_old
even_offers[i] <- even_offer_old
#print(odd_offer_old)
}
What happens to the offer to Odd as Even becomes more patient (beta increases)? Explain.
Download data from experiments with the ultimatum game in India HERE.
a. Estimate the responder's strategy using the whole data set.
b. Re-estimate the responder's strategy subsetting the data into 4 subsets based on the size of the payoffs.
c. Is there evidence that responder's play different strategies depending on the payoffs?
d. Is there evidence that proposers play different strategies depending on the payoffs?