Bargaining to split a resource

Reference no: EM13264013

Two countries, A and B, are bargaining to split a resource that is valued at $100. A makes the first offer, stating how the $100 will be divided between them. If B accepts the offer, the game is over. If B rejects it, the total available to bargain is reduced by $1 to $99. Then B gets to make an offer. The players take turns making offers this way, and each round the amount shrinks by $1. A makes offers in the odd numbered periods, and B makes offers in the remaining periods until they reach an agreement or they run out of money to divide. A’s outside option is $2.25 and B’s outside option is $3.50. Assume that if players are indifferent between an offer and their outside option, they accept the offer. Also assume that they do not discount future payoffs. Find the subgame perfect equilibria of this game using backward induction.

Reference no: EM13264013

Questions Cloud

Differences between deming’s theory and crosby’s theory : What are the major differences between Deming’s theory of profound knowledge and Crosby’s theory for zero defects? Which one is more suited for healthcare?

Determine the best crop to plant : A farmer in Georgia must decide which crop to plant next year on his land: corn, peanuts or soybeans. The return from each crop will be determined by whether a new trade bill with Russia passes the senate.

While loop to compute and print the sum : Write a program that uses a while loop to compute and print the sum and the average of the numbers entered from the keyboard one at a time.The program stops when the value entered is -99.

Homeless populations and families : How are the needs of homeless families similar to the needs of other homeless populations? In what ways are they different?

Bargaining to split a resource : Two countries, A and B, are bargaining to split a resource that is valued at $100. A makes the first offer, stating how the $100 will be divided between them.

Discuss unique issues related to children who are homeless : Discuss the unique issues related to children who are homeless. How does homelessness impact children’s health, their educational experiences, and their overall development?

Program using a do -while loop : Write a program that prints the numbers from 1 to 50 using a for loop. Rewrite the program using a do -while loop.

Vapor-liquid and two solid phases are in equilibrium : Show that it is not possible for a pure fluid to have a quaternary point where the vapor, liquid, and two solid phases are in equilibrium.

User Account

All Pages