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Two people, Baker and Cutler, play a game in which they choose and divide a prize. Baker decides how large the total prize should be;
Two people, Baker and Cutler, play a game in which they choose and divide a prize. Baker decides how large the total prize should be; she can choose either $10 or $100. Cutler chooses how to divide the prize chosen by Baker; Cutler can choose either an equal division or a split where she gets 90% and Baker gets 10%. Draw the payoff table of the game and find its equilibria for each of the following situations:
- When the moves are simultaneous.
- When Baker moves first.
- When Cutler moves first.
- Is this game a prisoners' dilemma? Why or why not?
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