Module 4 Final Quiz: Economic Strategy and Negotiation

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Module 4 Final Quiz: EcModule 4 Final Qui Module 4 Final Quiz Due No due date Points 20 Questions 20 Time Limit 60 Minutes Attempt History Attempt Time Score LATEST Attempt 1 48 minutes 20 out of ... 20  Correct answers are hidden. Score for this quiz: 20 out of 20 Submitted May 2 at 15:19 This attempt took 48 minutes. Question 1 1 / 1 pts BP and ExxonMobil are negotiating over the spilt of 200, associated with drilling in the Gulf of Mexico. BP can make an offer that it gets a share of α (between 0 and 1) of the 200, whilst ExxonMobil gets a share of (1 – α) of the booty. After receiving the proposal from BP, ExxonMobil can accept (A) or reject (R) the offer. If ExxonMobil accepts the offer, BP gets its proposed share α of 200, and ExxonMobil gets (1 – α) of 200. If ExxonMobil rejects the offer, the payoffs are 0 to BP and 50 to ExxonMobil. In the subgame perfect equilibrium, BP offers α = . 0.75 Question 2 1 / 1 pts02/05/2020 Module 4 Final Quiz: Economic Strategy and Negotiation https://canvas.sydney.edu.au/courses/23912/quizzes/94190 2/13 Chrissie owns a vintage guitar that she values at $0. Mark would like to buy the guitar and values it at $1000. The negotiations are as follows. Mark offers a price to Chrissie. If Chrissie agrees trade takes place at the agreed price. If Chrissie rejects the offer, negotiations end and each party receives a payoff of $0. What is the outcome of the negotiations? Trade takes place at a price of $500 Trade takes place at a price of $1000. Trade takes place at a price of $0 Mark offers a price close to $1000 and Chrissie rejects the offer Chrissie rejects any offer Mark makes. Question 3 1 / 1 pts Ainslie is in a team with Michelle and together they must produce a report for their boss. To determine who will do the work, they engage in the following negotiations: Ainslie can propose that either she does the work, or that Michelle does the work. Michelle can then accept or reject Ainslie’s offer. If Ainslie offers to do the work, and Michelle accepts this offer, Ainslie gets a payoff of 20 and Michelle a payoff of 40. If Michelle rejects this offer both get a payoff of 10. If Ainslie suggests Michelle do the work and Michelle accepts, the payoffs are 50 to Ainslie and 20 to Michelle. If Michelle rejects Ainslie’s suggestion that Michelle is the one who should complete the work, Ainslie has an opportunity to respond. At this juncture, Ainslie can opt not to do the work, and both workers get a payoff of 10. If Ainslie chooses to do the work, she receives a payoff of 15 and Michelle gets a return of 50. What is the outcome of this negotiation process? Ainslie suggests that she does the work herself, and Michelle refuses. Ainslie suggests Michelle do the work, and Michelle accepts.02/05/2020 Module 4 Final Quiz: Economic Strategy and Negotiation https://canvas.sydney.edu.au/courses/23912/quizzes/94190 3/13 Ainslie suggests Michelle do the work, and Michelle refuses; Ainslie then chooses to do the work. Ainslie suggests Michelle do the work, Michelle refuses; Ainslie then chooses not to do the work. Ainslie suggests she does the work, and Michelle accepts. Question 4 1 / 1 pts Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. CA can make either a High or Low wage offer. The Union sees the offer and then can Accept or Reject. If the Union Accepts a High offer the payoffs are 25 to CA and 75 to the Union. If the Union rejects a High offer from CA, the payoffs are 5 and 25 to CA and the Union respectively. If the Union Accepts a Low offer from CA, the payoffs are 80 to CA and 20 to the Union. Finally, if the Union Rejects a Low offer, the payoffs are 5 and 15 to CA and the union, respectively. What is the (credible) outcome of this bargaining scenario? Choose ALL the co [Show More]

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