Doc and Brewster are in a negotiation over royalties. The negotiations proceed as follows. Doc can set a price p. Having seen Doc's offer Brewster
Doc and Brewster are in a negotiation over royalties. The negotiations proceed as follows. Doc can set a price p. Having seen Doc's offer Brewster can either accept (A) or reject (R). If Brewster accepts Doc's offer the payoffs are p to Doc and 200 p to Brewster. If Brewster rejects (R) the payoffs are 0 to Doc and 40 to Brewster. What is the highest price p that Doc can offer that is accepted in the subgame perfect equilibrium? p = John is looking to sell his car and Mary is looking to buy it. John values the car at $2000 and Mary values it at $3000. Which of the following is true (select all that apply): John will accept any price above $2000 C] Mary will accept any price above $2000 The sale will only occur if the price is between 2000 and 3000. C] John will only accept prices between $2000 and $3000. C] None of the above
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