Refer to the normal-form game of bargaining shown below. $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Management }\
\text { Union }
\begin{array}{|l|l|l|l|}
\hline & \$ 0 & \$ 250 & \$ 500 \
\hline \$ 0 & (\$ 0, \$ 0) & (\$ 0, \$ 250) & (\$ 0, \$ 500) \
\hline \$ 250 & (\$ 250, \$ 0) & (\$ 250, \$ 250) & (-\$ 10,-\$ 10) \
\hline \$ 500 & (\$ 500, \$ 0) & (-\$ 10,-\$ 10) & (-\$ 10,-\$ 10)\
\hline
\end{array}\end{array}$ Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union.It is assumed that the surplus can only be split into $250 increments.Furthermore,negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union.The payoff structure to this one-shot bargaining game is listed in Figure 10-16.The number of efficient outcomes resulting from the bargaining game is:
A) 3.
B) 5.
C) 6.
D) 8.

Question

Refer to the normal-form game of bargaining shown below. $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Management }\
\text { Union }
\begin{array}{|l|l|l|l|} 
\hline & \$ 0 & \$ 250 & \$ 500 \
\hline \$ 0 & (\$ 0, \$ 0) & (\$ 0, \$ 250) & (\$ 0, \$ 500) \
\hline \$ 250 & (\$ 250, \$ 0) & (\$ 250, \$ 250) & (-\$ 10,-\$ 10) \
\hline \$ 500 & (\$ 500, \$ 0) & (-\$ 10,-\$ 10) & (-\$ 10,-\$ 10)\
\hline
\end{array}\end{array}$ Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union.It is assumed that the surplus can only be split into $250 increments.Furthermore,negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union.The payoff structure to this one-shot bargaining game is listed in Figure 10-16.The number of efficient outcomes resulting from the bargaining game is:
A) 3.
B) 5.
C) 6.
D) 8.

Quizplus · Accepted Answer

Efficient outcomes in a bargaining game are those where the resources are fully utilized without any waste. In this game, the efficient outcomes are those where the total surplus of $500 is split between the union and management without resulting in negative payoffs for either party. These outcomes are: - Management gives $0 and Union asks for $0, resulting in ($0, $0).- Management gives $250 and Union asks for $250, resulting in ($250, $250).- Management gives $500 and Union asks for $500, resulting in ($0, $500).These are the only combinations where the total surplus is fully allocated without any waste, making 3 the number of efficient outcomes.

Refer to the Normal-Form Game of Bargaining Shown Below Suppose That Management and the Union Are Bargaining Over How