Answer Happy

Asymmetric Patience 1: Consider a three-period sequential (alternating- offer) bargaining model in which two players have to split a pie worth I (starting with player 1 making the offer). Now the players have different discount factors, &, and 82. a. Compute the outcome of the unique subgame-perfect equilibrium.

b. Show that when 8₁ 8₂ player 1 has an advantage. C. What conditions on 8, and 82 give player 2 an advantage? Why?