Use the following information to answer question:
Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the following normal form game.
-Management and a labor union are bargaining over how much of a $50 surplus to give to the union.The $50 is divisible up to one cent.The players have one-shot to reach an agreement.Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer.Both players get zero if the total amounts asked for exceed $50.If you were the labor union, which type of "rules of play" would you prefer to divide the $50 surplus?
A)One-shot simultaneous-move game.
B)One-shot sequential-move game with management as the first mover.
C)One-shot sequential-move game with labor union as the first mover.
D)One-shot simultaneous-move game and one-shot sequential-move game with management as the first mover.

Question

Use the following information to answer question:
Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the following normal form game. 
-Management and a labor union are bargaining over how much of a $50 surplus to give to the union.The $50 is divisible up to one cent.The players have one-shot to reach an agreement.Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer.Both players get zero if the total amounts asked for exceed $50.If you were the labor union, which type of "rules of play" would you prefer to divide the $50 surplus?
A)One-shot simultaneous-move game. 
B)One-shot sequential-move game with management as the first mover. 
C)One-shot sequential-move game with labor union as the first mover. 
D)One-shot simultaneous-move game and one-shot sequential-move game with management as the first mover.

Quizplus · Accepted Answer

In a one-shot sequential-move game with labor union as the first mover, the labor union can ask for the entire $50 surplus, if management announces that they want only a fraction of the surplus. If management does not want the entire surplus, they will have to make an offer to the labor union that is higher than what the labor union would get by asking for the entire surplus. This gives the labor union more bargaining power and a greater chance of receiving a larger share of the $50 surplus.

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