Question
NEED HElP WITH GAME THEORY. Ann and Bob are going to split $10. They have agreed on the following rules. Ann rst divides the money
NEED HElP WITH GAME THEORY.
Ann and Bob are going to split $10. They have agreed on the following rules. Ann rst divides the money into two piles: $x in one pile and $10x in the other pile, where x = 0, 1, 2, 3, 4, or 5. Bob observes Anns division and then chooses which one of the two piles he will get; Ann gets the remaining pile.
(a) Model this situation as an extensive form.
(b) Count the number of strategies for each player.
(c) Does the game have perfect or imperfect information?
(d) Find all subgame perfect equilibria using backward induction.
(e) Find all Nash equilibria. (Dont try writing down the normal form. Just reason!)
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