DSE 2018 Question 45: Game theory and strategic behaviour
Persons 1, 2 and 3 divide 12 indivisible chocolates; each person's preference is strictly increasing in chocolates. Person 1 proposes a division and all vote Y or N; if at least two vote Y it is implemented. If not, Person 1 is eliminated and Person 2 proposes, with only 2 and 3 voting; if at least one votes Y, Person 2's proposal is implemented, otherwise Person 3 proposes and that is implemented. What division occurs in a subgame perfect equilibrium? (A person votes N if voting Y and N yield the same number of chocolates for that person.)
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Persons 1, 2 and 3 divide 12 indivisible chocolates; each person's preference is strictly increasing in chocolates. Person 1 proposes a division and all vote Y or N; if at least two vote Y it is implemented. If not, Person 1 is eliminated and Person 2 proposes, with only 2 and 3 voting; if at least one votes Y, Person 2's proposal is implemented, otherwise Person 3 proposes and that is implemented. What division occurs in a subgame perfect equilibrium? (A person votes N if voting Y and N yield the same number of chocolates for that person.) (A) 1 gets 12, 2 gets 0, 3 gets 0 (B) 1 gets 11, 2 gets 1, 3 gets 0 (C) 1 gets 11, 2 gets 0, 3 gets 1 (D) 1 gets 4, 2 gets 4, 3 gets 4
Game theory and strategic behaviour has come up 61 times in 6 exams since 2008.
What this question tests
This question is on Extensive-form games and backward induction, part of Game theory and strategic behaviour in Game Theory.
Games played in sequence, solved from the end back to the start.
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