Question
Suppose Amar and Vasin are dividing 10 chocolates between themselves. At the first period, Amar offers the split. If Vasin accepts the split, then they
Suppose Amar and Vasin are dividing 10 chocolates between themselves. At the first period, Amar offers the split. If Vasin accepts the split, then they share the chocolates according to Amar's offer. If Vasin does not agree to Amar's offer, in the next period, he gets to offer the split. However, only 9 chocolates will be there in the second period at the time when Vasin makes the offer. Assume that chocolates cannot be broken. Also, assume that if Vasin(Amar) is indifferent between two offers, he will accept the one that is most preferred by Amar(Vasin).
Question 1
(a) Write down the extensive form game.
(b) Solve for the subgame perfect equilibrium.
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