= Aisha (A) and Baasim (B) want to share a pizza of size 1. Suppose that Aisha derives utility uA (x): √x from x amount of pizza and Baasim derives utility uß(x) = √√x from x amount of pizza. Aisha discounts with 8A = 2/3 and Baasim discounts with 8B = 1/3. Aisha moves first. (a) Calculate the Rubinstein solution to the bargaining problem. Explain each step in your calculations.

= Aisha (A) and Baasim (B) want to share a pizza of size 1. Suppose that Aisha derives utility uA (x): √x from x amount of pizza and Baasim derives utility uß(x) = √√x from x amount of pizza. Aisha discounts with 8A = 2/3 and Baasim discounts with 8B = 1/3. Aisha moves first. (a) Calculate the Rubinstein solution to the bargaining problem. Explain each step in your calculations.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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