2 Rosa and Ernesto are going to split $10. They haveagreed to the following rules. Rosa first divides themoney into two piles, $x in one pile and $10-x inthe other pile, where x=0,1,2,3,4, or 5. Ernestoobserves Rosa's division and chooses which one ofthe two piles he will get; Rosa gets the remainingpile.a. Model this situation as an extensive form gameand draw a game tree to represent the extensiveform game.b. Use your game tree in part (a) to find all thebackward induction equilibrium (or equilibria) ofthe extensive game.c.How many strategies does Rosa have?d. How many strategies does Ernesto have?

There are two players in the game : Rosa & Ernesto Extensive form of game is that type of game…

Rosa and Ernesto are going to split $10. They have agreed to the following rules. Rosa first divides the money into two piles, $x in one pile and $10-x in the other pile, where x=0,1,2,3,4, or 5. Ernesto observes Rosa's division and chooses which one of the two piles he wwill get: Rosa gets the remaining

Rosa and Ernesto are going to split $10. They have agreed to the following rules. Rosa first divides the money into two piles, $x in one pile and $10-x in the other pile, where x=0,1,2,3,4, or 5. Ernesto observes Rosa's division and chooses which one of the two piles he wwill get: Rosa gets the remaining

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 17P

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