Business, 22.07.2019 22:30 salam6809

Suppose a record label is negotiating with a band over a contract. the band has no outside options and the evil record label does not want to waste time negotiating, so it makes a take-itor-leave it offer. the players move sequentially. first, the record label (player 1) has the option of making a fair (f) or unfair (u) offer to the band (player 2). next, the band can then either accept (a) the offer or reject (r) it. if the band rejects the offer, both players get $0. if the band accepts the fair offer, the record label and the band both get $5,000. if the band accepts the unfair offer, the record label gets $8,000 and the band gets $2,000. write out the extensive (tree) form of the game and solve for the equilibrium.

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Suppose a record label is negotiating with a band over a contract. the band has no outside options a...

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