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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 50 p to Brewster. If Brewster rejects (R) the payoffs are 20 to Doc and 40 to Brewster. With respect to the subgame perfect equilibrium, which statements are true? 3 Doc offers any price greater than or equal to 20 3 Doc offer a price less than or equal 40 j Brewster rejects the offer he gets in equilibrium :] Doc offers a price of p = 10 :] Brewster accepts the offer he gets in equilibrium :] Brewster accepts any offer of p 2 40
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