Susan and Bill are playing a sequential bargaining game that Susan makes the offer to Bill with the fraction ag of the total amunt of the payoffs when time t = 0. If Bill rejects the offer then Bill makes the offer to Susan with the fractions of the total amunt of the payoffs in the next time period t = 1. If Susan also rejects the offer, then an independent agent will split the payoffs into (0.3, 0.3) in between Susan and Bill in the next time period r = 2. If the discount factor value os for Susan is (65 =), for what range of discount values & would result in Bill agreeing to accept less than half the prize money immediately? (Notes: you should give your answer to 3 significant figures if it is NON-ZERO.)
Susan and Bill are playing a sequential bargaining game that Susan makes the offer to Bill with the fraction ag of the total amunt of the payoffs when time t = 0. If Bill rejects the offer then Bill makes the offer to Susan with the fractions of the total amunt of the payoffs in the next time period t = 1. If Susan also rejects the offer, then an independent agent will split the payoffs into (0.3, 0.3) in between Susan and Bill in the next time period r = 2. If the discount factor value os for Susan is (65 =), for what range of discount values & would result in Bill agreeing to accept less than half the prize money immediately? (Notes: you should give your answer to 3 significant figures if it is NON-ZERO.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Susan and Bill are playing a sequential bargaining game that Susan makes the offer to Bill with the fraction a g of the total
amunt of the payoffs when time t = 0. If Bill rejects the offer then Bill makes the offer to Susan with the fraction Bs of the
total amunt of the payoffs in the next time period i = 1. If Susan also rejects the offer, then an independent agent will split
the payoffs into (0.3,0.3) in between Susan and Bill in the next time period I = 2.
If the discount factor value ôs for Susan is (ds = ), for what range of discount values og would result in Bill agreeing to
accept less than half the prize money immediately?
(Notes: you should give your answer to 3 significant figures if it is NON-ZERO.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1b1a2ed6-3c4b-49cd-90d8-80c987af1f5c%2F8df49abf-2024-4a55-b3c5-e83ae95b5936%2Fhcda4s9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Susan and Bill are playing a sequential bargaining game that Susan makes the offer to Bill with the fraction a g of the total
amunt of the payoffs when time t = 0. If Bill rejects the offer then Bill makes the offer to Susan with the fraction Bs of the
total amunt of the payoffs in the next time period i = 1. If Susan also rejects the offer, then an independent agent will split
the payoffs into (0.3,0.3) in between Susan and Bill in the next time period I = 2.
If the discount factor value ôs for Susan is (ds = ), for what range of discount values og would result in Bill agreeing to
accept less than half the prize money immediately?
(Notes: you should give your answer to 3 significant figures if it is NON-ZERO.)
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