Suppose You and a Complete Stranger Must Split $100 in Even

question 18

Essay

Suppose you and a complete stranger must split $100 in even dollar increments.You propose a split, and the stranger with whom you are splitting the $100 either accepts or rejects.If she rejects, you both receive nothing.
a.What is the Nash equilibrium for this game?
b.The Nash equilibrium solution is not frequently observed in practice.Explain why.

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Definitions:

Payroll Register

A document that records the payment details of employees, including wages, deductions, and net pay for each pay period.

Payroll Register

A document that summarizes the earnings, deductions, and net pay of all employees for a specific payroll period.

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used as a financial or accounting period.

Gross Pay

The entire sum an employee receives in earnings before any taxes or deductions are subtracted.