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Sarah and Mike are negotiating over a Pizza. The negotiation happens at 12:30, 12:40, and 12:50. At 12:30 and 12:50 Sarah makes an offer and
Sarah and Mike are negotiating over a Pizza. The negotiation happens at 12:30, 12:40, and 12:50. At 12:30 and 12:50 Sarah makes an offer and Mike can either accept it or reject it. At 12:40 Mike makes an offer and Sarah can either accept it or reject it. If the offer is accepted, the negotiation will stop and the pizza will be divided as the accepted offer. Assume that the value of the pizza is decreasing as time passes and the values are 100 at 12:30, 75 at 12:40. And 30 at 12:50.1fthey cannot make an agreement by 12:50, both Will get 0. (1) Find out the Subgame Perfect Equilibrium of this gmne (2) Find out a Nash equilibrium that is not a Subgame Perfect Equilibrium of this game
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