1 Problem 4Consider a two-stage game where two players,Ann and Beth, must first decide on a game to play(either prisoner's dilemma or stag hunt), and, if theyagree, play that game. If they do not agree to playthe same game, neither player receives any payoff.The game is summarized below:2.2Beth cooperatedefectAnn cooperate0,3Beth prisoner'sdilemmadefectBeth cooperate3,0Ann prisoner'sdilemmastag huntstag hunt0,0defect1,1Beth prisoner'sdilemmastag hunt0,0Bethstag3,3staghare0,2AnnhareBeth stag2,0hare1,1a) Find the minimal proper subgames.b) Find the SPNE.

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Problem 4 Consider a two-stage game where two players, Ann and Beth, must first decide on a game to play (either prisoner's dilemma or stag hunt), and, if they agree, play that game. If they do not agree to play the same game, neither player receives any payoff. The game is summarized below: Beth cooperate 2,2 defect 0,3 Ann cooperate Beth prisoner's dilemma stag hunt defect Beth cooperate 3,0 Ann prisoner's dilemma stag hunt 0,0 defect 1,1 Beth prisoner's dilemma 0,0 Beth stag 3,3 stag hare hare Ann stag hunt 0,2 Beth stag 2,0 hare 1,1 a) Find the minimal proper subgames. b) Find the SPNE.

Problem 4 Consider a two-stage game where two players, Ann and Beth, must first decide on a game to play (either prisoner's dilemma or stag hunt), and, if they agree, play that game. If they do not agree to play the same game, neither player receives any payoff. The game is summarized below: Beth cooperate 2,2 defect 0,3 Ann cooperate Beth prisoner's dilemma stag hunt defect Beth cooperate 3,0 Ann prisoner's dilemma stag hunt 0,0 defect 1,1 Beth prisoner's dilemma 0,0 Beth stag 3,3 stag hare hare Ann stag hunt 0,2 Beth stag 2,0 hare 1,1 a) Find the minimal proper subgames. b) Find the SPNE.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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