Cricket Australia and the players’ union are in negotiations over the players’ wage for the upcoming Ashes tour. The negotiations are as follows. CA makes an offer of a wage w to the union. The union sees this offer and must decide to either accept or reject it. If it accepts the offer, the payoffs are 300 – w for CA, and w for the players’ union. If the union rejects, bargaining moves to a second round, in which the union makes a wage offer w2, which then CA must either accept or reject. If CA accepts the offer of w2, CA gets a payoff of 300 - w2, and the union gets w2.  If CA rejects the offer w2, both parties get 0. Which of the following is a possible outcome as a credible equilibria?Group of answer choicesCA offers a wage w = 0, the union rejects and counters with an offer of w2 = 200, and CA accepts.CA offers a wage w = 0, and the union accepts.CA offers a wage w = 300 and the union accepts.CA offers a wage 0, and the union rejects and counters with an offer of 299, and CA accepts.CA offers a wage of 300, the union rejects and counters with an offer of w2 = 299 and CA accepts.

Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. CA can make either a High or Low wage offer. The Union sees the offer and then can Accept or Reject. If the Union Accepts a High offer the payoffs are 25 to CA and 75 to the Union. If the Union rejects a High offer from CA, the payoffs are 10 and 90 to CA and the Union respectively. If the Union Accepts a Low offer from CA, the payoffs are 80 to CA and 20 to the Union. Finally, if the Union Rejects a Low offer, the payoffs are 10 and 90 to CA and the union, respectively. What is the (credible) outcome of this bargaining scenario?Group of answer choicesCA offers a Low wage and the union RejectsCA offers a High wage and the union Accepts.CA offers a High wage and the union RejectsCA offers a Low wage and the union AcceptsCA offers either a High or Low wage and the union Rejects

Consider the bargain between Cricket Australia (CA) and the players’ union. The two parties are in a negotiation over the players’ wage w, which proceeds as follows: the union makes a wage offer of w to CA; following this, CA sees the offer and can accept or reject. If CA accepts the offer, CA gets a payoff of 200 – w, where w is the wages paid to the players and union gets a payoff of w. If CA rejects the wage offer, each party gets 0.What is the outcome of the bargaining game?Group of answer choicesThe union offers CA pays a wage w = 10 and CA rejects.The union offers CA pays a wage w = 200 and CA accepts.The union offers CA pays a wage w = 0 and CA accepts.The union offers that CA pays a wage w = 100 and CA accepts.None of the above

Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. Assume that Cricket Australia and the union are bargaining over how much of a $200 surplus will be split. Suppose that CA moves first and makes an offer p. The union (U) may accept or reject the offer. If the offer is rejected neither party gets anything. If the offer is accepted the Union gets p and the CA gets 200 - p. How much better off or worse off would it be for CA if U moves firsts and makes an offer p which would give CA  a payoff of p and U a payoff of 200 – p if the offer is accepted and a payoff of 0 to each party otherwise? Assume that the possible offers to be made are $1, $100 or $199.

Consider the wage negotiations between Cricket Australia (CA) and the union that represents the players. Assume that CA and the union are bargaining over how much of a $100 surplus will be split. Suppose than CA moves first and makes an offer. The union (U) may accept or reject the offer. If the offer is rejected neither party gets anything. If the offer is accepted the Union gets the amount offered and the CA gets the remaining residual. What is the (credible) outcome of this bargaining scenario?Group of answer choicesCA offers $1 and the Union rejects.CA offers $99 and the Union accepts.CA offers $50 and the Union rejects.CA offers $1 and the Union accepts.CA offers $50 and the Union accepts.

The Australian government is negotiating a trade deal with the EU. The use of terms like ‘fetta’ by Australian firms is one of the negotiating sticking points. Consider the following negotiation. The EU can offer “No Fetta” or “Status Quo” (that is allow Australia to continue to use such terms). Following either choice by the EU, Australia can choose “Accept” of “Reject”. If the EU offers “No Fetta” and Australia accepts, the payoffs are (50, 10) to the EU and Australia, respectively. If the EU offers “No Fetta” and Australia Rejects, the payoffs are (30, 20). Now consider the payoffs if the EU offers the “Status Quo”. If Australia “Rejects” this offer, the payoffs are (30, 20). If, on the other hand, Australia “Accepts” this offer, the payoffs are 50 to each region.Group of answer choicesThe EU offers “Status Quo” and Australia “Accepts”.The EU offers “No Fetta” and Australia “Rejects”.The EU offers “No Fetta” and Australia “Accepts”.There is no credible equilibrium.The EU offers “Status Quo” and Australia “Rejects”.