Terry wants to sell his car and the lowest price he is willing to accept is $3,0

Question

Terry wants to sell his car and the lowest price he is willing to accept is $3,000. Alice likes the car and is willing to pay at most $4,000 for it. They begin to negotiate to arrive at a price. Which of the following statements will be true?

a. They are playing a zero-sum game. b. They are playing a positive-sum game where their benefits add up to $1,000. c. The longer they take to arrive at an agreed price, the lower the benefit to them. d. The higher the price they agree on, the greater the benefit to both.

Explanation / Answer

a. They are playing a zero-sum game.

A zero sum game is a siutation where one party's gain (or loss) of utility is exactly balanced by the losses (or gains) of the utility of the other party(s).

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