Management and a Labor Union Are Bargaining Over How Much

question 46

Multiple Choice

Management and a labor union are bargaining over how much of a $100 surplus to give to the union.The $100 is divisible up to one cent.The players have one shot to reach an agreement.Management has the ability to announce what it wants first,and then the labor union can accept or reject the offer.Both players get zero if the total amounts asked for exceed $100.Which of the following is NOT a Nash equilibrium?

• A) Management requests $50 and the labor union accepts $50.
• B) Management requests $70 and the labor union accepts $20.
• C) Management requests $100 and the labor union accepts $0.
• D) Neither management requesting $100 and the labor union accepting $0 nor management requesting $70 and the labor union accepting $20 are Nash equilibria.

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Definitions:

Just Noticeable Difference

The smallest difference in a stimulus that an organism can barely perceive.

Difference Threshold

The minimum difference in stimulation that an individual can detect 50% of the time, also known as the just noticeable difference (JND).

Difference Threshold

The minimum difference in stimulation that a person can detect 50 percent of the time, also known as the just-noticeable difference (JND).

Absolute Threshold

The minimum intensity at which a stimulus can be detected by an individual 50% of the time.