14.12 Game Theory
Due on 10/31/2005
1. Two players
rst simultaneously declare Yes or No. If any of the player declares No,
then each player gets 80. If both players declare Yes, then they play the following
Find all the subgame-perfect equilibria of the entire game.
2. Consider the bargaining game discussed in the class, where two players try to divide
a dollar, which they cannot consume until they divide, and the payo
. At each date a player proposes a division
other player accepts or rejects. If the o
er is accepted, then it is implemented, ending
the game; otherwise, we proceed to the next date. The order of proposers is Player 1,
Player 1, Player 2, Player 1, Player 1, Player 2, Player 1, .
. . , i.e., Player 1 makes two
ers for each o
er of Player 2.
(a) Assume that the game ends at date