this way in every round,your total profits for all ten rounds will be $562.50. Your compe etitors profits will be $1,125.However.with ar output of 15 every time your competitor announces an output of 15,profits will be reduced to zero for both of you in that period.If your competitor fears,or learns,that you will respond in this way,he or she will be better off by choosing the Cournot output of 10.and your profits after that point will be $75 per period.Whether this strategy is profitable depends on your opponent'sexpectations about your behavior,as well as how you value future profits relative to current profits (Note:A problem could develop in the last period,however,because your competitor will know that you realize that there are no more long-term gains to be had from behaving strategically.Thus.your competitor will announc an output of 15.krowing that you will reapo nd with an outnut of 75 Furth ore,knowing that you will not respon strategically in the last period,there are also no long-term gains to be made in the ninth period from behaving strategically.Therefore,in the ninth period,your competitor will announce an output of 15,and you should respond rationally with an output of7.5,and so on.) 0 You play the following bargaining game. Player A moves first and makes offer for the divisi a of $i (For exam ple. ugg that she take $60 and Player B take $40). Player B can accept or reject the offer If he rejects it,the amount of money available drops to $90,and he then makes an offer for the division of this amount.If Player A rejects this offer,the amount of money drops to $80 and Player A makes an offer for its division.If Player B rejects this offer,the amount of money drops to. Both players rational,fully informed,and want to maximize their payoffs Which player will do best in this game? Solve the game by starting at the end and working backwards.If B rejects A's offer at the 3rd round.B gets 0.When a makes an offer at the 3rdround.B will accept even a minimal amount,such as $1.So A should offer S1 at this stage and take $79 for herself.In the 2nd stage,B knows that A will turn down any offer giving her less than $79.so B must offer $80 to A.leaving $10 for B. At the firs stage,A knows B will turn down any offer giving him less than $10.So A can offer $11 to B and keep $89 for herself.B will take that offer,since B can never do any better by rejecting and waiting.The following table summarizes this. Round Money Offering Party Amount to A Amount to B Availablethis way in every round, your total profits for all ten rounds will be $562.50. Your competitor’s profits will be $1,125. However, if you respond with an output of 15 every time your competitor announces an output of 15, profits will be reduced to zero for both of you in that period. If your competitor fears, or learns, that you will respond in this way, he or she will be better off by choosing the Cournot output of 10, and your profits after that point will be $75 per period. Whether this strategy is profitable depends on your opponent’s expectations about your behavior, as well as how you value future profits relative to current profits. (Note: A problem could develop in the last period, however, because your competitor will know that you realize that there are no more long-term gains to be had from behaving strategically. Thus, your competitor will announce an output of 15, knowing that you will respond with an output of 7.5. Furthermore, knowing that you will not respond strategically in the last period, there are also no long-term gains to be made in the ninth period from behaving strategically. Therefore, in the ninth period, your competitor will announce an output of 15, and you should respond rationally with an output of 7.5, and so on.) 9. You play the following bargaining game. Player A moves first and makes Player B an offer for the division of $100. (For example, Player A could suggest that she take $60 and Player B take $40). Player B can accept or reject the offer. If he rejects it, the amount of money available drops to $90, and he then makes an offer for the division of this amount. If Player A rejects this offer, the amount of money drops to $80 and Player A makes an offer for its division. If Player B rejects this offer, the amount of money drops to 0. Both players are rational, fully informed, and want to maximize their payoffs. Which player will do best in this game? Solve the game by starting at the end and working backwards. If B rejects A’s offer at the 3rd round, B gets 0. When A makes an offer at the 3rd round, B will accept even a minimal amount, such as $1. So A should offer $1 at this stage and take $79 for herself. In the 2nd stage, B knows that A will turn down any offer giving her less than $79, so B must offer $80 to A, leaving $10 for B. At the first stage, A knows B will turn down any offer giving him less than $10. So A can offer $11 to B and keep $89 for herself. B will take that offer, since B can never do any better by rejecting and waiting. The following table summarizes this. Round Money Offering Party Amount to A Amount to B Available 1 $100 A $89 $11 2 $ 90 B $80 $10