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3. This game is based on the book "Real Men Don't Eat Quiche" by Bruce Feirstein. There are two players sitting at a bar. The timing is as follows: i. Nature determines P1's type as "wimp" or "surly". P1 observes it, P2 doesn't. (and this is common knowledge) ii. P1 chooses whether to order a beer or a quiche. iii. P2 sitting next to P1, observes P1's choice. Then P2 decides whether to start a fight with P1 or not. The extensive form is given below. Let numbers p and q denote P2's conditional beliefs in the two information sets. 1,3 FB 2 FQ 2,1 BW 1W QW 2 P 4,0 NB 9. [0.3] wimp NO 0,0 1,0 FB 2,4 NB [0.7] surly FQ 1,2 1-q 2 B$ 15 Q 2 NO 0,1 (a) Is there a pooling PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 (b) Is there a separating PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 P = 9 = P

3. This game is based on the book "Real Men Don't Eat Quiche" by Bruce Feirstein. There are two players sitting at a bar. The timing is as follows: i. Nature determines P1's type as "wimp" or "surly". P1 observes it, P2 doesn't. (and this is common knowledge) ii. P1 chooses whether to order a beer or a quiche. iii. P2 sitting next to P1, observes P1's choice. Then P2 decides whether to start a fight with P1 or not. The extensive form is given below. Let numbers p and q denote P2's conditional beliefs in the two information sets. 1,3 FB 2 FQ 2,1 BW 1W QW 2 P 4,0 NB 9. [0.3] wimp NO 0,0 1,0 FB 2,4 NB [0.7] surly FQ 1,2 1-q 2 B$ 15 Q 2 NO 0,1 (a) Is there a pooling PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 (b) Is there a separating PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 P = 9 = P

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.5P
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3. This game is based on the book "Real Men Don't Eat Quiche" by Bruce Feirstein. There are two players sitting at a bar. The timing is as follows: i. Nature determines P1's type as "wimp" or "surly". P1 observes it, P2 doesn't. (and this is common knowledge) ii. P1 chooses whether to order a beer or a quiche. iii. P2 sitting next to P1, observes P1's choice. Then P2 decides whether to start a fight with P1 or not. The extensive form is given below. Let numbers p and q denote P2's conditional beliefs in the two information sets. 1,3 FB 2 FQ 2,1 BW 1W QW 2 P 4,0 NB 9. [0.3] wimp NO 0,0 1,0 FB 2,4 NB [0.7] surly FQ 1,2 1-q 2 B$ 15 Q 2 NO 0,1
Transcribed Image Text:3. This game is based on the book "Real Men Don't Eat Quiche" by Bruce Feirstein. There are two players sitting at a bar. The timing is as follows: i. Nature determines P1's type as "wimp" or "surly". P1 observes it, P2 doesn't. (and this is common knowledge) ii. P1 chooses whether to order a beer or a quiche. iii. P2 sitting next to P1, observes P1's choice. Then P2 decides whether to start a fight with P1 or not. The extensive form is given below. Let numbers p and q denote P2's conditional beliefs in the two information sets. 1,3 FB 2 FQ 2,1 BW 1W QW 2 P 4,0 NB 9. [0.3] wimp NO 0,0 1,0 FB 2,4 NB [0.7] surly FQ 1,2 1-q 2 B$ 15 Q 2 NO 0,1
(a) Is there a pooling PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 (b) Is there a separating PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 P = 9 = P
Transcribed Image Text:(a) Is there a pooling PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 (b) Is there a separating PBE of this game? YES or NO? (Circle one). If YES, describe one (and only one): S₁ = Use space below for your argumentation. $2 P = 9 = P
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