Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. Assume that Cricket Australia and the union are bargaining over how much of a $200 surplus will be split. Suppose that CA moves first and makes an offer p. The union (U) may accept or reject the offer. If the offer is rejected neither party gets anything. If the offer is accepted the Union gets p and the CA gets 200 - p. Assume that the CA can make offers of $1, $100 or $199. How much better off or worse off would it be for CA if U moves firsts and makes an offer p which would give CA a payoff of p and U a payoff of 200 - p if the offer is accepted and a payoff of O to each party otherwise?

Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. Assume that Cricket Australia and the union are bargaining over how much of a $200 surplus will be split. Suppose that CA moves first and makes an offer p. The union (U) may accept or reject the offer. If the offer is rejected neither party gets anything. If the offer is accepted the Union gets p and the CA gets 200 - p. Assume that the CA can make offers of $1, $100 or $199. How much better off or worse off would it be for CA if U moves firsts and makes an offer p which would give CA a payoff of p and U a payoff of 200 - p if the offer is accepted and a payoff of O to each party otherwise?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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