Two players use the following procedure to divide a perfectly homogeneous and continuously divisible cake.
First, Player 1 divides the cake into two pieces and then Player 2 chooses one of the pieces. Player 1 gets the remaining piece. Each player cares only about the size of the piece s/he gets.
How is the cake divided in a sub-game perfect equilibrium if both the players are rational?
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Game theory and strategic behaviour has come up 61 times in 6 exams since 2008.
This question is on Applied games: public goods, voting and location, part of Game theory and strategic behaviour in Game Theory.
Strategic models of provision, voting, bargaining and where to locate.
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Question from the GATE 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.