Suppose Amar and Vasin are dividing 10 chocolates between themselves. At the first period, Amar offers the split. If Vas
Posted: Sun Jun 05, 2022 4:54 pm
Suppose Amar and Vasin are dividing 10 chocolates between
themselves. At the first period, Amar offers the split. If Vasin
accepts the split, then they share the chocolates according to
Amar’s offer. If Vasin does not agree to Amar’s offer, in the next
period, he gets to offer the split. However, only 9 chocolates will
be there in the second period at the time when Vasin makes the
offer. Assume that chocolates cannot be broken. Also, assume that
if Vasin(Amar) is indifferent between two offers, he will accept
the one that is most preferred by Amar(Vasin).
Question 1 (a) Write down the extensive form game.
(b) Solve for the subgame perfect equilibrium. (200 words)
themselves. At the first period, Amar offers the split. If Vasin
accepts the split, then they share the chocolates according to
Amar’s offer. If Vasin does not agree to Amar’s offer, in the next
period, he gets to offer the split. However, only 9 chocolates will
be there in the second period at the time when Vasin makes the
offer. Assume that chocolates cannot be broken. Also, assume that
if Vasin(Amar) is indifferent between two offers, he will accept
the one that is most preferred by Amar(Vasin).
Question 1 (a) Write down the extensive form game.
(b) Solve for the subgame perfect equilibrium. (200 words)