Question
Two players have $10 to divide between themselves. They use the following process to divide the money. Each person names a number of dollars (a
Two players have $10 to divide between themselves. They use the following process to divide the money. Each person names a number of dollars (a nonnegative integer), at most equal to 10. If the sum of the amounts that the players name is at most 10, then each player receives the amount of money she names (the remainder is destroyed). If the sum of the amounts that the people name exceeds 10 and the amounts named are different, then the player who names the smaller amount receives that amount and the other player receives the remaining money. If the sum of the amounts that the people name exceeds 10 and the amounts named are the same, then each player receives $5. Determine the best response of each player to each of the other player's actions, and find the pure strategy NE of this game.
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