Anna and Ben have to split a cake. The cake consists of 6 pieces. Anna and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Anna and Ben have to split a cake. The cake consists of 6 pieces. Anna and Ben take turns in making offers, Anna starts. (The offers can be any real numbers.) After each rejected offer ants however take away A pieces of cake (or the rest of the cake in case less than A pieces are left). The utility from the cake is ui(k)= ki, i = {A, B}, where ki is the number of pieces of cake that i receives. Let A = 1.5. a) How will Anna and Ben agree? Determine the subgame perfect equili- brium! b) Is the negotiation solution efficient? Justify your answer in one sentence! c) Give a Nash equilibrium in which Ben receives strictly more than Anna! Why is this not subgame perfect? d) Determine all values of A, for which Ben receives at least as many pieces as Anna in the subgame perfect equilibrium! Anna and Ben have to split a cake. The cake consists of 6 pieces. Anna and Ben take turns in making offers, Anna starts. (The offers can be any real numbers.) After each rejected offer ants however take away A pieces of cake (or the rest of the cake in case less than A pieces are left). The utility from the cake is ui(k)= ki, i = {A, B}, where ki is the number of pieces of cake that i receives. Let A = 1.5. a) How will Anna and Ben agree? Determine the subgame perfect equili- brium! b) Is the negotiation solution efficient? Justify your answer in one sentence! c) Give a Nash equilibrium in which Ben receives strictly more than Anna! Why is this not subgame perfect? d) Determine all values of A, for which Ben receives at least as many pieces as Anna in the subgame perfect equilibrium!
Expert Answer:
Answer rating: 100% (QA)
The question describes a bargaining problem between two parties Anna and Ben over how to split a cake with certain rules Lets analyze each part of the question a How will Anna and Ben agree Determine ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
Students also viewed these programming questions
-
General A is defending a territory which is accessible by two mountain passes against general B. A has three divisions at her disposal and B has two divisions. Each general allocates her divisions...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Perform the indicated operations. Let k be a natural number. a. (-2) c. (-2)4 e. Is (-2)2+ positive or negative? b. (-2) d. (-2)5
-
The accompanying table describes the random variable x, the numbers of adults in groups of five who reported sleepwalking. Complete parts (a) through (d) below. a. Find the probability of getting...
-
You have just purchased a new warehouse. To finance the purchase, youve arranged for a 30-year mortgage for 80 percent of the $4,500,000 purchase price. The monthly payment on this loan will be...
-
Almetals, Inc., a Michigan company, entered into a contract with the German firm Wickeder Westfalenstahl regarding the purchase of clad metal, a specialty metal used in a variety of industries but...
-
The petty cash fund of Fonzarellis Auto Repair Service, a sole proprietorship, contains the following. The general ledger account Petty Cash has a balance of $300. Instructions Prepare the journal...
-
3) The cost and revenue function in dollar terms for a fast-food joint is given as follows: C(x)=200x+200 and R(x) = 50x X + 4 If x is measured in hundreds of units, what is the break-even point for...
-
For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called...
-
Drug A costs $400 for every person-year saved from malaria, and Drug B costs $1,000 for every person-year saved from malaria. Thus: A. Drug A is more cost-effective than Drug B B. Drug A and Drug B...
-
a. b. C. d. e. f. Explain what are unobserved heterogeneity in panel data analysis? Provide a real example of unobserved heterogeneity? Define the two basic approaches to modelling the unobserved...
-
You are asked to make a staining solution of PBST that contains both primary antibody at 1:200 final concentration and FITC-lectin at 1:100 final concentration. If you make a total of 0.5 ml of the...
-
Let {a} be a sequence such that lim a, = LE R and define b 71-00 Show that lim br 71-00 = L. = n TL k=1 ak for each n N.
-
Solve the equation. 5*-32x = 25* X= (Use a comma to separate answers as needed.)
-
The point charges in the figure below are located at the corners of an equilateral triangle 15.0 cm on a side. (Assume that the +x-axis is to the right and the +y-axis is up along the page.) + (a)...
-
1. State the objectives of the auditor when reporting on a set of financial statements? 2. Alfred Shikongo is the assigned auditor on the audit of Khomas CC. He has been requested by the management...
-
In Exercises, find the equation of the tangent line at the given point on each curve. 2y 2 - x = 4; (16, 2)
-
In this exercise, we explore the concept of elasticity in contexts other than own-price elasticity of (uncompensated) demand. (In cases where it matters, assume that there are only two goods). A. For...
-
Every Thanksgiving, my wife and I debate about how we should prepare the turkey we will serve (and will then have left over). My wife likes preparing turkeys the conventional way roasted in the oven...
-
In our development of producer theory, we have found it convenient to assume that the production technology is homothetic. A: In each of the following, assume that the production technology you face...
-
Draw Bode plots for a sixth-order Pade approximation to a pure delay of 1 second.
-
A rejection network that can be utilised instead of the twin-T network is the bridged-T network shown below. The transfer function of this network is given by \[...
-
Sketch the polar plot of the frequency response for the following transfer functions: 1 (a) KG(s): = (1+0.5s) (1+2s) (1+0.5s) (b) KG(s) = $2 s+10 (c) KG(s) = s2+6s+10 30(s+8) (d) KG(s) = s(s+2)(s+4)
Study smarter with the SolutionInn App