We consider a game between two players, Alice and Bob. Alice chooses a number x (between -infinity and +infinity), and Bob chooses a number y (between -infinity and +infinity). Alice's payoff is given by the following function: 35 x + 87 x y - 95 x squared. (the last entry is "x squared".) Bob's payoff is given by the following function: 30 y + 42 x y + 75 y squared. (the last entry is "y squared".) Calculate Alice's strategy in the (unique) Nash equilibrium of this game.
We consider a game between two players, Alice and Bob. Alice chooses a number x (between -infinity and +infinity), and Bob chooses a number y (between -infinity and +infinity). Alice's payoff is given by the following function: 35 x + 87 x y - 95 x squared. (the last entry is "x squared".) Bob's payoff is given by the following function: 30 y + 42 x y + 75 y squared. (the last entry is "y squared".) Calculate Alice's strategy in the (unique) Nash equilibrium of this game.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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We consider a game between two players, Alice and Bob. Alice chooses a number x (between -infinity and +infinity), and Bob chooses a number y (between -infinity and +infinity). Alice's payoff is given by the following function: 35 x + 87 x y - 95 x squared. (the last entry is "x squared".) Bob's payoff is given by the following function: 30 y + 42 x y + 75 y squared. (the last entry is "y squared".) Calculate Alice's strategy in the (unique) Nash equilibrium of this game.
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