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  3. 6 marks total corporate division suppose that there are five...

Question: 6 marks total corporate division suppose that there are five...

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(6 marks total) Corporate Division Suppose that there are five executives on the board of directors of a major financial corporation: the CEO and four vice-presidents. After a particularly profitable ear, the five executives learn that there is a surplus of 100 million dollars to be shared among the board members, and they call a meeting to decide how to split up the money. After some deliberation, they agree on the following setup: . A proposal about how to split up the money is presented, and then voted upon. A proposal is just a way to split up the 100 million dollars. For simplicity (and because these executives are all very rich) we will assume that the proposal units are in millions of dollars. For instance, one possible proposal for the CEO would be to keep 60 million for herself, and give 10 million to each of the four vice-presidents, another possibile proposal is 100 million for the CEO and zero for everyone else. . After each proposal is presented, there is a vote. In order for a proposal to pass, it needs to be agreed on by 50% or more of the board members that are voting (the proposer is allowed to vote for their own proposal). If the proposal passes, then the money will be split up accordingly; if the proposal is rejected then the board member who made that proposal will lose their right to vote in the future. If the proposal is rejected, the next board member in line will then make a new proposal and the process repeats. . The order for proposals is as follows: CEO VP1 VP2VP3VP4 Assuming that board members are perfectly rational, how will the money be divided? Explain.
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