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Consider the following bargaining game. Player A moves first and makes Player B an offer for the division of £200 (For example, Player A could suggest that they take £100 and Player B take £100) Player B can accept or reject their offer. If they reject they can make a counter-offer, discounted by a rate . There are up to four offer rounds in total, so each player can make at most two offers each with the amount available discounted at each round. If the game reaches the final round where Player B makes an offer, Player A can reject or accept and if they reject both players receive nothing.
a. Find the Subgame Perfect Equilibrium of the game above
b. Who has the advantage PlayerA or Player B?
c. How would the result differ if there were infinite rounds instead of four?
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