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the person making the offer can get everything.
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So in period two, they must be getting δ times that,
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so in period one you have to give them at least this much.
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And this here is the offer you'd make in the three stage game.
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So in the picture we're just doing a little zigzag;
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on the chart we're also always working across the diagonal.
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So we've done the one stage game: the one stage game,
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the person making the offer gets everything.
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In the two stage game, the person making the offer
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offers just enough to get the offer accepted
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which is $δ because that's what $1 is worth tomorrow.
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In the three stage game,