1. Draw the extensive form (tree) of the following game. 2. Find the perfect equilibrium. What are the payoffs in this equilibrium? 3. Draw the strategic form (matrix) of the game and find a non- perfect equilibrium. Player I chooses "black" or "white". After hearing player I's announcement, Player II also chooses "black" or "white". If both choose "black" - the game ends, and each receives 1. If they choose different colors - the player who chooses "white" receives and the player who chooses "black" receives 0. If both choose "white" - they toss a fair coin. If the outcome is heads-player I receives 4 and player II receives (-2). If the outcome is tails - player II receives 4 and player I receives (-2).
1. Draw the extensive form (tree) of the following game. 2. Find the perfect equilibrium. What are the payoffs in this equilibrium? 3. Draw the strategic form (matrix) of the game and find a non- perfect equilibrium. Player I chooses "black" or "white". After hearing player I's announcement, Player II also chooses "black" or "white". If both choose "black" - the game ends, and each receives 1. If they choose different colors - the player who chooses "white" receives and the player who chooses "black" receives 0. If both choose "white" - they toss a fair coin. If the outcome is heads-player I receives 4 and player II receives (-2). If the outcome is tails - player II receives 4 and player I receives (-2).
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter15: Strategic Games
Section: Chapter Questions
Problem 2MC
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