2. Consider the following "centipede game." The game starts with player 1 choosing be- tween terminate (T) and continue (C'). If player 1 chooses C, the game proceeds with player 2 choosing between terminate (t) and continue (c). The two players choose be- tween terminate and continue in turn if the other player chooses continue until the terminal nodes with (player l's payoff, player 2's payoff) are reached as shown below. Player 1 Player 2 Player 1 Player 2 (3, 3)| (1, 1) (0, 3) (2, 2) (1, 4)

2. Consider the following "centipede game." The game starts with player 1 choosing be- tween terminate (T) and continue (C'). If player 1 chooses C, the game proceeds with player 2 choosing between terminate (t) and continue (c). The two players choose be- tween terminate and continue in turn if the other player chooses continue until the terminal nodes with (player l's payoff, player 2's payoff) are reached as shown below. Player 1 Player 2 Player 1 Player 2 (3, 3)| (1, 1) (0, 3) (2, 2) (1, 4)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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