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The question is in the image. 3. (6 marks) Consider the following variation of the innite-round alternating offers bargaining problem with player 1 proposing in

The question is in the image.

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3. (6 marks) Consider the following variation of the innite-round alternating offers bargaining problem with player 1 proposing in odd periods and player 2 proposing in even periods. There are two one-dollar bills to allocate and nobody has any change, Thus, at any stage, the proposer can only propose to (i) keep both dollars, (ii) keep one dollar and give the other dollar to the other player, or (iii) give both dollars to the other player. A proposal can be either accepted or rejected by the other player. If it is accepted, the dollar is split according to the proposal. Otherwise, the bargaining moves to the next period. Both individuals discount money received in the future by the per-period discount factor 6, Where 0

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