Compute the subgame perfect equilibrium of this game - in


Consider the following discounted, three-period bargaining game.

The discount factor is 5, where 0 < 6 < 1. In this game, player 1 makes the first offer. If player 2 rejects this offer, then player 1 makes another offer. If player 2 rejects the second offer, then player 2 makes the final offer.

In other words, player 1 makes the offers in periods 1 and 2, whereas player 2 makes the offer only in period 3.

Compute the subgame perfect equilibrium of this game.

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Game Theory: Compute the subgame perfect equilibrium of this game - in
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