Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 16, Problem 7MC
To determine
Bargaining.
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The band is breaking up and Rob, Sue, Tim and Vito each want the tour bus. Using the method of sealed bids, Rob bids $2000, Sue bids $3100, Tim bids $5900, and Vito bids $7000 for the bus. Since Vito's bid is the highest, he gets the bus and has to compensate the others to make the division fair. How much money will Sue get from Vito?
In bargaining without impatience, explain how the number of bargaining rounds and who makes the first offer affect the final outcome.
explaining the strategic view of bargaining. Present a numerical example and discuss how each player would make decisions.
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Managerial Economics: A Problem Solving Approach
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