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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 &s for Susan is (ds = ), for what range of discount values ög 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 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 &s for Susan is (ds = ), for what range of discount values ög 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.)

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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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.)
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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