use the following setup
Consider a sequential game between a shopkeeper and a haggling customer.The party who moves first chooses either a high price ($50)or low price ($20)and the second mover either agrees to the price or walks away from the deal and neither party gets anything.Ignore costs and assume the customer values the item at $60.
-This sequential game illustrates a
A)Third mover advantage
B)Second mover advantage
C)First mover advantage
D)No advantage based on moves

Question

use the following setup
Consider a sequential game between a shopkeeper and a haggling customer.The party who moves first chooses either a high price ($50)or low price ($20)and the second mover either agrees to the price or walks away from the deal and neither party gets anything.Ignore costs and assume the customer values the item at $60.
-​This sequential game illustrates a
A)​Third mover advantage
B)Second mover advantage
C)First mover advantage
D)​No advantage based on moves

Quizplus · Accepted Answer

The shopkeeper, as the first mover, can set a high price knowing the customer values the item at $60. The customer will agree to the high price since it is still below their valuation, giving the shopkeeper a first mover advantage.

Use the Following Setup