Question: Question 3: Consider the following bargaining game between Ann and Bob. There are four rounds, with alternating offers. They need to decide how to split

Question 3: Consider the following bargaining game between Ann and Bob. There are four rounds, with alternating offers. They need to decide how to split $10. In the first round, Ann gets to make an offer, which is either accepted or rejected by Bob. If the offer is accepted, then the game ends. If rejected, then Bob gets to make an offer for the split, which Ann can reject or accept, and so on, until either an offer is accepted, or the time runs out. Suppose that Ann discounts the future at rate bA = 0.8 and Bob discounts the future at rate bB = 0.6. Solve for the equilibrium split and on which round it is realized.

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