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Consider a three-period sequential (alternating offer) bargaining model in which two players have to split a pie worth 1 (starting with player 1 making the

Consider a three-period sequential (alternating offer) bargaining model in which two players have to split a pie worth 1 (starting with player 1 making the offer). Now the players have different discount factors,1and2.

(a) Compute the outcome of the unique subgame-perfect equilibrium. (

b) Show that when1=2, player 1 has an advantage.

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