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There are three players Ann, Bob, and Charles who are bargaining over splitting a fully divisible surplus worth 1. There are two time periods, t=1

There are three players Ann, Bob, and Charles who are bargaining over splitting a fully divisible surplus worth 1. There are two time periods, t=1 ("today") and t=2 ("tomorrow").

In each time period:

  • the probability that Ann gets chosen to propose is 0.25,
  • the probability that Bob gets chosen to propose is 0.35,
  • and the probability that Charles gets chosen to propose is 0.4.

A proposal that proposes how to split the surplus worth 1 amongst the three players is accepted if at least 2 people approve, else it is rejected.

Assume if someone is exactly indifferent between accepting and rejecting, they always choose to accept the proposal.

All players have the same discount factor 0<<1.

How do I solve this game?

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