-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 explanation for the outcome of this bargaining game is the:
A) Savage theorem.
B) Bertrand paradox.
C) Cournot model.
D) Minimax theorem.
E) Stackelberg theorem.

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 explanation for the outcome of this bargaining game is the:
A) Savage theorem. 
B) Bertrand paradox. 
C) Cournot model. 
D) Minimax theorem. 
E) Stackelberg theorem.

Quizplus · Accepted Answer

The Minimax theorem is related to zero-sum games and strategies that minimize the maximum possible loss, which aligns with the nature of this bargaining game where players must avoid exceeding the sum of $100 to avoid losing everything.

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