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Game Theory and Strategy · End Term · 1 Sept 2024 · May 2024 term · Set QDB3

Question 5: A joint enterprise of three partners, 1, 2, and 3, consis…

Question 5

+2 marksNumerical answer

A joint enterprise of three partners, 1, 2, and 3, consists of a travel agency, a car rental agency, a tour company, a souvenir shop, and a delivery service. The owner of the car rental agency, 1, forms a partnership with the owner of the travel agency, 2. Later the two purchase a souvenir shop, which they let their wives run. The owner of the tour company, 3, enters into a partnership with 2 and the two open a delivery service. Now 3 enters into the comprehensive partnership and the enterprise is the operation of all these businesses together.

We need to remember that v(S)v(S) is the price that coalition SS can achieve in the market for all the assets that belong either to it or to its sub-coalitions. We shall describe the game in terms of the coalition function:

v(1)=20v(2)=30v(3)=10v(1,2)=40v(1,3)=0v(2,3)=30v(1,2,3)=60v(ϕ)=0\begin{array}{llll} v(1) = 20 & v(2) = 30 & v(3) = 10 & v(1,2) = 40 \\ v(1,3) = 0 & v(2,3) = 30 & v(1,2,3) = 60 & v(\phi) = 0 \end{array}

At a certain stage the joint enterprise starts losing money and the partners decide to liquidate it.

Calculate how much each of the partners will get from the sale of the whole enterprise, if they carry out the division according to the procedure for dissolving a partnership.

Based on the above data, answer the given subquestions

Partner 2 will get ___________________

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Correct answer: 36.7 (accepted within ±0.1)

Question 5 of 37 in the IIT Madras BS Game Theory and Strategy (Game Theory) End Term paper sat on 1 Sept 2024, in the May 2024 term (IIT M DEGREE AN EXAM QDB3 01 Sep 2024). It carries 2 marks.

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