Andrew Wants to Purchase Adam's Car

Multiple Choice

Andrew wants to purchase Adam's car. Andrew is prepared to pay a maximum of $2,000. Adam is not willing to accept anything lower than $1,000. Suppose that any failure to reach an agreement reduces Andrew's and Adam's gain from reaching an agreement by 10 percent. If there is no limit to the number of negotiating rounds, what percentage of the bargaining surplus should Adam receive?

A) Around 51 percent.
B) Around 53 percent.
C) Around 57 percent.
D) Around 62 percent.
E) None of the above.