Compute and describe the nash equilibria

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Nash's demand game6:-

Compute and describe the Nash equilibria of the following static bargaining game. Simultaneously and independently, players 1 and 2 make demands m1 and m2. These numbers are required to be between 0 and 1. If m1 + m2 ... 1 (compatible demands, given that the surplus to be divided equals 1), then player 1 obtains the payoff m1 and player 2 obtains m2. In contrast, if m1 + m2 > 1 (incompatible demands), then both players get 0.

In addition to describing the set of equilibria, offer an interpretation in terms of bargaining weights as in the standard bargaining solution.

Reference no: EM131251541

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