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Use the Following Setup

Question 25

Multiple Choice

use the following setup
Consider a sequential game between a shopkeeper and a haggling customer.The party who moves first chooses either a high price ($50) or low price ($20) and the second mover either agrees to the price or walks away from the deal and neither party gets anything.Ignore costs and assume the customer values the item at $60.
-​If the shopkeeper goes first and quotes a high price,what is the best response of the customer?


A) ​Accept the high price
B) Yell at the store owner
C) Walk away from the deal
D) ​Swear off shopping forever

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