Game theory Example Sample Homework
Question: Suppose that Sven has a V W Cabrio that he would like to sell. Unfortunately, the speedometer on the car is broken and in need of repair. Sven is accustomed to driving the car in this condition and it is worth $3,000 to him fixed or not. Sven would like to sell the car to move up to something with a little more muscle. Jeff and only Jeff is willing to buy the car for $3,500 as is or for $4,500 if the speedometer is fixed. Both Sven and Jeff know each others’ values and that they can get the car repaired at cost by Passport Motors for $600.