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Ally (player A] and Benji (player B) are in a restaurant. The owner offers 5 slices of cake for free under the following condition. A
Ally (player A] and Benji (player B) are in a restaurant. The owner offers 5 slices of cake for free under the following condition. A and B announce the number of slices they would like. Each can announce (exactly) one of the four numbers: (5/2) 2, 5/2, (5/2] + 2, and 5. Let SA and 53 respectively denote the numbers announced by A and B. If 5,; + 53 s S, then each gets what they announce. Otherwise, if SA + $3 > 5, each gets 0. We assume that player is utility equals the number of slices player i gets. Both A and B maximize their own utility. Assume S = 6. (3] Suppose A and B announce the number of slices simultaneously. In this simultaneous move game, the number of Nash equilibria in pure strategies is (b) Now consider a sequential move game where A proposes a split (SA, 5 - SA] to B where, as before, SA can take one of the four values: (5/2) 2, 5/2, (5/2] + 2, and S. If B accepts the split, then A gets 5A and B gets 5 - SA. Else, if B rejects, each gets 0. If indifferent between accepting and rejecting a proposal, we assume B rejects. In the unique subga me perfect equilibrium of the game A proposes SA =
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