-Consider the one-time Nash bargaining game depicted in Figure 12.2 in which Gog andMagog are bargaining over the distribution of $100. Bids must be in increments of $50. In this game, the sum of the players' bids cannot exceed $100. If the sum of the bids are less than $100, each bidder receives his bid, and the rest is forfeited to the Exchequer. If the sum of the bids exceeds $100, the bidders receive nothing, and $100 is forfeited to the Exchequer. The most likely Nash equilibrium strategy profile for this game is:
A) {$0, $0}.
B) {$50, $50}.
C) {$0, $100}.
D) {$100, $0}.
E) Answers c and d are equally likely.

Question

-Consider the one-time Nash bargaining game depicted in Figure 12.2 in which Gog andMagog are bargaining over the distribution of $100. Bids must be in increments of $50. In this game, the sum of the players' bids cannot exceed $100. If the sum of the bids are less than $100, each bidder receives his bid, and the rest is forfeited to the Exchequer. If the sum of the bids exceeds $100, the bidders receive nothing, and $100 is forfeited to the Exchequer. The most likely Nash equilibrium strategy profile for this game is:
A) {$0, $0}. 
B) {$50, $50}. 
C) {$0, $100}. 
D) {$100, $0}. 
E) Answers c and d are equally likely.

Quizplus · Accepted Answer

In a Nash equilibrium, neither player can benefit by unilaterally changing their strategy. The strategy profile {$50, $50} ensures that both players receive their bids without exceeding the $100 limit, making it a stable outcome.

-Consider the One-Time Nash Bargaining Game Depicted in Figure 12