Question
Suppose you and a classmate are playing a game where your classmate proposes a division of $1.00. Then, you either accept or reject the offer.
Suppose you and a classmate are playing a game where your classmate proposes a division of $1.00. Then, you either accept or reject the offer. If you accept, then you and the classmate get the proposed portions of the dollar. However, if you reject the offer, then you and your classmate receive nothing. Suppose your classmate offers you
$0.23.
Question 1.
What is your optimal strategy? Your optimal strategy is to ( a. accept or b. reject ?)
the proposed division.
Question 2.
Now suppose instead that you propose the division of the dollar. Your classmate will then accept or reject your division. If the classmate accepts, then you each receive the portion of the dollar as you have proposed. However, if your classmate rejects, then you both get nothing.
Your optimal strategy is to offer your classmate $ ?
(Enter a numeric response rounded to two decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started