Question

Suppose you and a classmate are playing a game where your classmate proposes a division of​ $1.00. ​ Then, you either accept or reject the offer. If you​ accept, then you and the classmate get the proposed portions of the dollar. ​ However, if you reject the​offer, then you and your classmate receive nothing.
Suppose your classmate offers you $0.12
What is your optimal​ strategy?
Your optimal strategy is to _________ the proposed division.
A. Accept
B. Reject
Now suppose instead that you propose the division of the dollar. Your classmate will then accept or reject your division. If the classmate​ accepts, then you each receive the portion of the dollar as you have proposed. ​ However, if your classmate​ rejects, then you both get nothing.
Your optimal strategy is to offer your classmate ​$_______. (Enter a numeric response to two decimal places)

Answer 1

Answer:

1. Your optimal strategy is to accept the proposed division.
2. Your optimal strategy is to offer your classmate ​$ 0.49.

Explanation:

An optimarl strategy is one that maximizes a player’s expected payoff. In this case this is a cooperative game.