Question8

Anita and Bonita have been roommates for the past two years while they've been in graduate school. Now that they're graduating, they are each planning to move to different cities. Their one joint asset is a rug, which both of them really like. They have agreed to play a Texas Shoot-Out to decide who gets the rug.

Anita knows that Bonita values the rug somewhere between $400 and $600, and she thinks all values in this range are equally likely. Bonita knows that Anita values the rug at $300. Both sides are fully aware of all this. Furthermore, the roommates are on good terms, so you can assume neither side will act spitefully toward the other.

What offer should Anita expect to receive from Bonita?

Question9

In the above scenario, if Anita were to offer Bonita a price of $200, what is Anita's expected payout?