Question: 24.6 Everyday Application: Another Way to Split the Pot: Suppose again, as in exercise 24.5, that two players have $100 to split between them. A.

24.6 Everyday Application: Another Way to Split the Pot: Suppose again, as in exercise 24.5, that two players have $100 to split between them.

A. But now, instead of one player proposing a division and the other accepting or rejecting it, suppose that player 1 divides the $100 into two piles and player 2 then selects his preferred pile.

a. What is the subgame perfect equilibrium of this game?

b. Can you think of a Nash equilibrium (with an outcome different than the subgame perfect outcome) that is not subgame perfect?

c. In exercise 24.5, we considered the possibility of restricting offers to be in integer amounts, to be in pennies, etc. Would our prediction differ here if we made different such assumptions?

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