02/05/2020 Module 4 Final Quiz: Economic Strategy and Negotiation
https://canvas.sydney.edu.au/courses/23912/quizzes/94190 2/9
Chrissie offers a price of $0 and Mark accepts
Chrissie offers a price of $600 and Mark ac
...
02/05/2020 Module 4 Final Quiz: Economic Strategy and Negotiation
https://canvas.sydney.edu.au/courses/23912/quizzes/94190 2/9
Chrissie offers a price of $0 and Mark accepts
Chrissie offers a price of $600 and Mark accepts.
Chrissie offers a price of $500 and Mark rejects.
Question 3 1 / 1 pts
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. Chrissie suggests a price to Mark. If Mark
agrees trade takes place at the agreed price. If Mark 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 $1000.
Chrissie offers a price close to $1000 and Mark rejects the offer
Mark rejects any offer Chrissie makes.
Trade takes place at a price of $500
Trade takes place at a price of $0
Question 4 1 / 1 pts
JJ and PW are in a negotiation that involves each party simultaneously choosing their strategy.
JJ can either offer a high (H) or a low (L) price. PW can opt to Accept (A) or reject (R). If JJ
opts for H and PW A, the payoffs are 6 to JJ and 4 to PW. If JJ opts for H and PW R, the
payoffs are 4 to JJ and 6 to PW. If JJ goes L and PW A, the payoffs are 8 to JJ and 3 to PW.
Finally, if JJ goes L and PW R, the payoffs are 7 and 5, to JJ and PW, respectively. Which of
the following statements are true?
The Nash equilibrium is (L, R)
This negotiation resembles a prisoners’ dilemma.
The Nash equilibrium is (H, A)
JJ has a dominant strategy to set a high (H) price.
The Nash equilibrium in the negotiation is (H, R).
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