Scenario: Neil and Claire are playing a game. Neil has been given five cookies and has been asked to decide how many he would like to give Claire. Claire has to decide whether to accept Neil's offer or reject it.
-Refer to the scenario above.In equilibrium,Neil will give ________ to Claire if no other factors such as fairness are at work.
A) five cookies
B) one cookie
C) four cookies
D) two cookies

Question

Quizplus · Accepted Answer

In a scenario where only self-interest is at work and assuming rational behavior, Neil would give the minimum possible to Claire, which is one cookie, to ensure Claire accepts the offer. Giving any more would reduce Neil's share without any strategic benefit, assuming Claire acts rationally and accepts any positive number of cookies since receiving one cookie is better than none.

Scenario: Neil and Claire Are Playing a Game