a. Given that player 1 knows she will get x in period 3 if the game continues
Question:
a. Given that player 1 knows she will get x in period 3 if the game continues to period 3, what is the lowest offer she will accept in period 2 (taking into account that she discounts the future as described)?
b. What payoff will player 2 get in period 2 if he offers the amount you derived in (a)? What is the present discounted value (in period 2) of what he will get in this game if he offers less than that in period 2?
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ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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