An economics professor has devised an interesting game to test the understanding of his students.He randomly selects two students from his class and gives one of them a $50 bill.He then asks the student what percentage of the $50 she would give to her classmate.The first student can choose any percentage she wishes,while the second student can choose whether or not to accept the offer.If the second student does not accept the offer,the professor will take the bill back,but if he accepts the offer,the money will be divided in the ratio decided by the first student.
a)What is the likely outcome of this game if both students value more money to less?
b)What is the likely outcome of this game if the second student values fairness?

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The Answer of An economics professor has devised an interesting game to test the understanding of his students.He randomly selects two students from his class and gives one of them a $50 bill.He then asks the student what percentage of the $50 she would give to her classmate.The first student can choose any percentage she wishes,while the second student can choose whether or not to accept the offer.If the second student does not accept the offer,the professor will take the bill back,but if he accepts the offer,the money will be divided in the ratio decided by the first student.
a)What is the likely outcome of this game if both students value more money to less?
b)What is the likely outcome of this game if the second student values fairness?

An Economics Professor Has Devised an Interesting Game to Test