Question: Fred and Barney are negotiating with each other to divide $4. Simultaneously, each proposes an integer between 0 and 4 (inclusive) to represent the amount

Fred and Barney are negotiating with each other to divide $4. Simultaneously, each proposes an integer between 0 and 4 (inclusive) to represent the amount that Fred gets. If they propose the same number, Fred receives the proposed amount and Barney receives the rest. If they propose different numbers, neither gets anything. Does either player have a dominant strategy, weakly dominated or dominated strategy? Identify all the Nash equilibria. Is there an equilibrium in which Fred and Barney don't reach an agreement (that is, in which they make different proposals)? If such equilibrium exists, is it reasonable? Why or why not?

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No strategies are dominant strategies or dominated strategies Fred picking 0 and Barney picking 4 are weakly dominated strategies The Nash equilibria ... View full answer

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