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Erica and Tino are both Simon alums; they recently reacquain… | Wiki Cram

Erica and Tino are both Simon alums; they recently reacquain…

Questions

Ericа аnd Tinо аre bоth Simоn alums; they recently reacquainted at Meliora Weekend, and their discussions eventually centered on a potential business deal. Erica is the founder and CEO of ABC Analytics, Inc. (ABC). Tino is the founder and CEO of Global Design, Ltd. (GDL). Coincidentally, ABC and GDL each own 3 constrictor flange tool and die machines (“constrictors”) and 3 robotic assembly resonators (“resonators”). Though Erica doesn’t know it, Tino wants to reconfigure his company’s product line and needs constrictors more than resonators. Likewise, Tino doesn’t know that Erica is reconfiguring her company’s product line and needs resonators more than constrictors. For Tino, a constrictor now is worth 4 utils (a util being a uniform measure of utility) and a resonator is worth 1 util. For Erica, a resonator now is worth 4 utils and a constrictor is worth 1 util. Erica and Tino decided to discuss a potential deal regarding trades of constrictors for resonators. Assume that the parties will only engage in trades that make themselves better off and that the only available issues in this negotiation are resonators/constrictors. What can we say about Tino’s situation?

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