Answered: 2 1 НС LC HD LD 0, 4 0,4 3, 3 3, 3 Н 1,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Normal Form: Which one of the following descriptions below is CORRECT according to this Normal Form shown?

1.) If Player 2 believes that Player 1 randomly choose H or L with same probability, then Player 2's expected for choosing HC is 2.

2.) If Player 1 has 20% chance to play H and 80% chance to play L, Player 2 has 40% chance to play HD and 60% chance to play LC; then Player 1's expected payoff is 2.

3.) If Player 2 randomly play one of its 4 strategies without any preference, then Player 1's expected payoff for playing L is 2.5.

4.) If Player 2 believes that Player 1 has no probability to play L, then Player 2 would prefer to choose HC or HD.

2
1
НС
LC
HD
LD
0, 4
0,4
3, 3
3, 3
Н
1, 1
1, 1
4, 0
4, 0

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