P wants to appoint A to bargain with T on P's behalf over splitting up an...

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P wants to appoint A to bargain with T on P's behalf over splitting up an amount of K. P offers A a contract (a,b) where a denotes A's share of the bargaining outcome, denoted Y, and b is A's reward in case she fails to close an agreement with T. Both A and T are risk-neutral. If A accepts the contract (a,b), then a.A closes an agreement with T if b>ak. b.bargaining between A and T is characterized by the Nash product [aY+b][K-Y]. c.None of the other statements is true. d.A ends up with (ak+b)/2 if closing an agreement with T. e.if A and T close an agreement, then it will be Y = (ak-b)/2a. P wants to appoint A to bargain with T on P's behalf over splitting up an amount of K. P offers A a contract (a,b) where a denotes A's share of the bargaining outcome, denoted Y, and b is A's reward in case she fails to close an agreement with T. Both A and T are risk-neutral. If A accepts the contract (a,b), then a.A closes an agreement with T if b>ak. b.bargaining between A and T is characterized by the Nash product [aY+b][K-Y]. c.None of the other statements is true. d.A ends up with (ak+b)/2 if closing an agreement with T. e.if A and T close an agreement, then it will be Y = (ak-b)/2a.

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The detailed answer for the above question is provided below The correct statement is d A ends up wi... View the full answer