Question

. 13. Suppose Pilu and Nilu have a cake, which they need to divide among themselves. The rules are as follows: > Pilu will propose a split, for example, she can offer a 12/88 split which means she gets 12 and Nilu gets 88% of the cake. D Nilu decides If the split is acceptable or not. If she agrees the cake is split otherwise it is thrown away and nobody gets anything a) Find the Nash equilibrium of the game. 50, 50 b) What would happen if Nilu did not have the choice to reject and had to accept the offer of Pilu? 1 2, BB - Nash equilibrium c) Would the outcome be any different if the game were to be repeated 5 times? Explain