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Question 2 (4 points) Three people use the following procedure to divide a (perfectly divisible and homogenous) cake. Player 1 rst divides the cake into
Question 2 (4 points) Three people use the following procedure to divide a (perfectly divisible and homogenous) cake. Player 1 rst divides the cake into two pieces. Next, player 2 selects one of the two pieces. Player 1 gets the other share, while player 2 must now divide the piece he or she picked. Finally, player 3 chooses one of the two pieces that player 2 just created, and player 2 consumes what remains. Suppose that each player cares only about the size of the piece of cake he or she ultimately obtains. Compute the subgame perfect Nash equilibrium (please provide complete strategies, not just the equilibrium payos)
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