In the Above Decision Tree,Matthew Picks First and Dean Picks

question 36

Multiple Choice

In the above decision tree,Matthew picks first and Dean picks second.Matthew and Dean both know the payoffs to each choice for both themselves and each other.
-Refer to the decision tree above.Suppose Dean promises Matthew that he will always select the upper branch at either Y or Z.Dean offers to sign a legally-binding contract that penalizes him if he fails to choose the upper branch at Y or Z.For the contract to make Dean's promise credible,the value of the penalty must be

• A) any positive number.
• B) more than $1.5 million.
• C) less than $100.
• D) more than $500,000.
• E) more than $500.

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Definitions:

Liberals

Individuals or groups advocating for policies that emphasize freedom, democracy, and equality in social, political, and economic spheres.

Conservatives

A political and social philosophy promoting traditional values, the status quo, and resistance to rapid change.

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