Consider a sequential bargaining game between 2 players. The players have access to 8 units of a resource. Player
1 starts the game and has the chance to make a fair offer or an unfair offer to Player 2. The fair option consists in offering half of the resource available, and the unfair one consists in offering only 1/4 of the resource and keeping the rest. In either case, if Player 2 accepts the offer, they will split it accordingly.
Otherwise, if Player 2 rejects the initial offer, they will move to a second round of bargaining. In the second round only half of the original resource units are available. Player 2 will be the one making an offer to Player 1 of the now reduced resource. Player 2 can choose between making a fair
(1/2) or unfair (1/4) offer. If Player 1 rejects the final offer, they lose all resource units, otherwise they will split according to the accepted proposal. Formulate the game as an extensive form game and solve it.