Question

2. Consider the game tree below. Player 1 makes Player 2 either a (L)ow offer of a split of R1000 (where Player 1 keeps R999 and Player 2 receives R1) or makes an offer of an (E)ven split. Player 2 can either (A)ccept or (R)eject the offer from Player 1. If Player 2 rejects the offer, both players get no money. (a) What is the strategy set of Player 1? (b) What is the strategy set of Player 2? (c) What is the path of play for the strategy profile (E, RA)?. (d) Is the path of play for the strategy profile (E, RA) optimal? (e) Explain your response to 2d.

          2. Consider the game tree below. Player 1 makes Player 2 either a (L)ow offer of a split of R1000 (where Player 1 keeps R999 and Player 2 receives R1) or makes an offer of an (E)ven split. Player 2 can either (A)ccept or (R)eject the offer from Player 1. If Player 2 rejects the offer, both players get no money.

(a) What is the strategy set of Player 1?
(b) What is the strategy set of Player 2?
(c) What is the path of play for the strategy profile (E, RA)?.
(d) Is the path of play for the strategy profile (E, RA) optimal?
(e) Explain your response to 2d.

Added by Yolanda M.

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