A game theorist is walking down the street in his neighborhood and finds $20. A game theorist is walking down the street in his neighborhood and finds $20.
A game theorist is walking down the street in his neighborhood and finds $20. Just as he picks it up, two neighborhood kids, Jane and Tim, run up to him, asking if they can have it. Because game theorists are generous by nature, he says he’s willing to let them have the $20, but only according to the following procedure: Jane and Tim are each to submit a written request as to their share of the $20. Let t denote the amount that Tim requests for himself and j be the amount that Jane re- quests for herself. j and t are required to be chosen from the interval [0,20]. If then the two receive what they requested, and the remainder, is split equally between them. If, however,
then they get nothing, and the game theorist keeps the $20. Tim and Jane are the players in this game. Assume that each of them has a payoff equal to the amount of money that he or she receives. Find all Nash equilibria.