Consider the CBA negotiating with Myer regarding the rate of interest for a loan. The CBA can offer any interest rate r between 0 and 10. If Myer accepts the payoff to the CBA is r, and the payoff to Myer is 10 – r. If Myer rejects the offer the payoffs are 0 to the CBA and 4 to Myer.What do we observe in the credible (subgame perfect) equilibrium of this negotiation?Group of answer choicesThe CBA offers r = 10 and Myer rejectsThe CBA offers r = 0 and Myer acceptsThe CBA offers r = 4 and Myer acceptsThe CBA offers r = 10 and Myer acceptsThe CBA offers r = 6 and Myer accepts

Doc and Brewster are in a negotiation over royalties. The negotiations proceed as follows. Doc can set a price p. Having seen Doc’s offer Brewster can either accept (A) or reject (R). If Brewster accepts Doc’s offer the payoffs are p to Doc and 50 – p to Brewster. If Brewster rejects (R) the payoffs are 20 to Doc and 40 to Brewster. With respect to the subgame perfect equilibrium, which statements are true?Group of answer choicesDoc offers a price of p = 10Brewster rejects the offer he gets in equilibriumBrewster accepts the offer he gets in equilibriumBrewster accepts any offer of p ≥ 40.Doc offers any price greater than or equal to 20Doc offer a price less than or equal 40

Consider a negotiation between a car buyer and a used-car salesperson. The car salesperson values a car at $10,000 and the buyer values it at $12,000. Suppose the buyer moves first and offers a price p. The car salesperson can accept or reject the offer. If the offer is rejected the buyer can buy an identical car from a different dealer for a price of $5000. In the subgame perfect equilibrium: Group of answer choices Buyer offers $10,000 and the car salesperson rejects Buyer offers $10,000 and the car salesperson accepts Buyer offers $12,000 and the car salesperson rejects. Buyer offers $5000 and the car salesperson rejects Buyer offers $5000 and the car salesperson accepts Buyer offers $12,000 and the car salesperson accepts

A subgame perfect equilibrium is a Nash equilibrium thatGroup of answer choicescan only be achieved if the game is played repeatedlyinvolves only credible threats.consists only of dominant strategies.is uniquenone of the other answers are correct

Consider the following entry game. NW Coffee decides whether to Enter or Not Enter a market. If NW Coffee chooses Not Enter it gets a payoff of -10 and Dunkin’ Donuts (DDs) gets a payoff of 30. If NW Coffee Enters, DDs can choose to either Punish or to Cooperate. If DDs chooses Punish following Enter, the payoffs are -5 to NW Coffee and 25 to DDs. If DDs chooses to Cooperate following Enter, NW Coffee gets a payoff of 20 and DDs gets 20. What are the subgame (credible) equilibria?Group of answer choices(Enter, Cooperate).(Not Enter, Punish)(Enter, Punish)There is no subgame equilibrium.None of the other answers are correct.

Doc and Brewster are in a negotiation over royalties. The negotiations proceed as follows. Doc can set a price p. Having seen Doc’s offer Brewster can either accept (A) or reject (R). If Brewster accepts Doc’s offer the payoffs are p to Doc and 500 – p to Brewster. If Brewster rejects (R) the payoffs are 0 to Doc and 150 to Brewster. What is the highest price p that Doc can offer that is accepted in the subgame perfect equilibrium? p =                       .