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A man has two sons Robert and Collin and when he dies the value of his estate is $100'000. In his will it states that
A man has two sons Robert and Collin and when he dies the value of his estate is $100'000. In his will it states that the two sons must each specify a sum of money sR and sC (in multiple of thousands) which they are willing to accept. If sR +sC 100000 then they both get what they asked for and the remainder is sent to an animal shelter. If sR + sC > 100000 then neither son receives any money and all the money goes to the animal shelter.
- Interpret this situation as a game where each son only cares about maximizing his profit and find all the Nash equilibria for this game.
- Find the equilibrium if Robert makes an offer to Collin and Collin only can accept or reject.
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