Question: Question 5 16 marks a) Which factors influence the bargaining outcome in the Nash formulation of the bargaining problem? b ) Alice (A) and Bob

Question 5 16 marks a) Which factors influence the bargaining outcome

Question 5 16 marks a) Which factors influence the bargaining outcome in the Nash formulation of the bargaining problem? b ) Alice (A) and Bob (B) want to share a pizza of size 1. Suppose Alice has utility uA(x) = Vx from a amount of pizza and Bob has utility up(x) = Va from x amount of pizza. If they don't find an agreement, Alice receives half of the pizza and Bob receives nothing. Calculate the Nash Bargaining solution for the problem! c) Who receives a large piece of the pizza? Explain why that is the case

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