Unformatted text preview: at its initial node is to pass. Defense’s equilibrium strategy is Run Defense if Offense plays Run and Pass Defense if Offense plays Pass. 3) In the last round, player B would offer player A none of the cake. In the previous round (round 3), player A would keep 2/7 th of the cake and offer player B 2/7 th of the cake. In round 2, player B would offer player A 2/7 th of the cake. Thus in the first round player A offers player B 4/7 th of the cake and player B immediately accepts. So in equilibrium, player A gets 3/7 th and player B gets 4/7 th of the cake....
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This note was uploaded on 04/02/2008 for the course ECON 398 taught by Professor Emre during the Spring '07 term at University of Michigan.
- Spring '07