5. Consider a sequential game between a shopkeeper and a haggling customer. The party who moves first chooses either a high price ($50) or low price ($20) and the second mover either agrees to the price or walks away from the deal and neither party gets anything. Ignore costs and assume the customer values the item at $60. In the strategic view of bargaining the outcome depends on

a. Who makes the first move

b.Who can commit to a position

c. Whether or not the other party can make a countermove

d. All of the above

4. Consider a simultaneous move game between a union and a company. If both the parties bargain hard, each would gain nothing. If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million, while if they both accommodate, they each get $3 million.

If the firm hires security guards to enforce a lockout, what are they implying?

a. They would always accommodate

b. They would always bargain hard

c. They would not accommodate

d. Both B&C

6. Consider a simultaneous move game between a union and a company. If both the parties bargain hard, each would gain nothing. If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million, while if they both accommodate, they each get $3 million.

If the firm threatens a lockout (and the threat is credible), what is the unions best response?

a. Accommodate

b. Run

c. Hide

d. Bargain hard