Networks, Markets and Society(Bargaining and Power in Networks)

Lecture video: https://mediaspace.msu.edu/media/Converted+MI302+2021Power+and+Bargaining/1_r02op1e2These are the questions:Q1: Explain why behavioral and experimental economics was devised (15:04 in the video)Q2: Explain how the ultimatum game solves a limitation of Nash bargaining solution (44:45 in the video)Q3: Write down the formal definition of instability (51:56 in the video)Q4: Write down the formal definition of balanced outcomes (58:23 in the video)Discussion Q: This chapter’s most important lesson is that an individual’s power is not only a personal trait but a property of the network. This chapter introduces four models (Nash bargaining solution, ultimatum game, stable outcomes and balanced outcomes) whose predictions support this claim.Use at least one model of the four to build your argument as to why and how one’s network position grants power to him/her. Then, expand your answer to describe what you will do personally in order to improve or modify your network position in such a way to increase your bargaining power. This plan of yours must be based on the model you chose to argue that a network position gives someone power. For instance, if you used Nash Bargaining Solution to claim that one can build power using a network position and structure, and you should also apply the same principle in Nash bargaining solution to come up with a plan to improve your position in your personal network.