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IIT Kanpur *

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211

Subject

Economics

Date

Nov 24, 2024

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1

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9. Weak dominance-IIL2 In several game shows across the US and UK, two players work together to build up a cash prize for the end of the show of size M. At the end of the show, each player must simultaneously choose whether to “Split” or to “Steal” the cash prize. © [ 1493 . . M If both players choose “Split,” each player leaves the show with half the cash price, 5 . * If one player chooses “Split” while the other player chooses “Steal,” the player who chooses “Split” receives none of the cash prize, while the player who chooses “Steal” receives the whole cash prize. * If both players choose “Steal,” they both receive none of the cash prize. (a) Depict the normal-form representation of this game. (b) Identify any strictly or weakly dominated strategies in this game. (c) Which is your equilibrium prediction after applying IDSDS? (d) Which is your equilibrium prediction after applying IDWDS?
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