Consider a situation where Eric and Alex’s grandmother wants to give them a gift. She gives Eric $50 (5 10-dollar bills), and tells Eric to split them up between him and Alex. If Alex accepts the split, then each grandson keeps his gift. But if Alex rejects the split, they both get nothing! (Grandma does want her grandsons to get along after all!)
Think about what you would do:
1) If you are Eric, how much should you offer to Alex?
2) If you are Alex, when should you accept the deal? Should you accept the split if Eric gives you $30? $20? 10$?