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Henry is moving to France and wants to sell his car before he leaves. Reese is interested in purchasing the car. After looking the car
Henry is moving to France and wants to sell his car before he leaves. Reese is interested in purchasing the car. After looking the car over and taking it for a test drive, Reese values the car at $10,000. Henry makes a 'take-it-or-leave-it' offer to Reese. Either Reese agrees to pay Henry $8,065 for the car or Henry will give it to his friend, Oscar. Using backward induction, what payoff do you expect Reese to receive? Henry is moving to France and wants to sell his car before he leaves. Reese is interested in purchasing the car. After looking the car over and taking it for a test drive, Reese values the car at $10,000. Henry makes a 'take-it-or-leave-it' offer to Reese. Either Reese agrees to pay Henry $8,065 for the car or Henry will give it to his friend, Oscar. Using backward induction, what payoff do you expect Reese to receive
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