Consider a sequential-move version of a rock-paper-scissor game. Players sequentially form one of three shapes with an outstretched hand. These shapes are "rock", "paper", and "scissors". A player playing rock will beat another player playing chosen scissors, but will lose to one playing paper; a play of paper will lose to a play of scissors. If both players choose the same shape, the game is tied. Suppose the winner receives a payoff of 1 and the loser receives the payoff of -1. Both players receive zero payoff under a tie. Suppose Player 1 moves first and Player 2 moves afterwards. In this game, what is the subgame perfect Nash equilibrium payoff of Player 1? 1

Consider a sequential-move version of a rock-paper-scissor game. Players sequentially form one of three shapes with an outstretched hand. These shapes are "rock", "paper", and "scissors". A player playing rock will beat another player playing chosen scissors, but will lose to one playing paper; a play of paper will lose to a play of scissors. If both players choose the same shape, the game is tied. Suppose the winner receives a payoff of 1 and the loser receives the payoff of -1. Both players receive zero payoff under a tie. Suppose Player 1 moves first and Player 2 moves afterwards. In this game, what is the subgame perfect Nash equilibrium payoff of Player 1? 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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