Question
Two parties 1, 2 bargain over splitting an amount of money, denoted A. In case of non-agreement, party 1 would receive only B a.
Two parties 1, 2 bargain over splitting an amount of money, denoted A. In case of non-agreement, party 1 would receive only B a. The Nash bargaining solution is given by X*= argmax[B-X][A-X]. b. None of the other statements is correct. c. According to the Nash bargaining solution, party 2 receives (A-B)/2. d. If B is increased by one Euro (but still falls short of A), then X decreases by 50 cents. e. The Nash bargaining solution is X* = (A-B)/2.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
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538453257, 978-0538453257
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