Consider a simultaneous-choice game in which the principal can choose to delegate (D) or centralise (C) and a worker can opt for either low (L) or high (H) effort. The payoffs are (1, 2) if the choices are (D, L) to the principal and the agent, respectively. The payoffs are (3, 4) if the choices are (C, H). If either (C, L) or (D, H) are chosen, the payoffs are O to both players. If in the mixed strategy equilibrium, the principal plays D with probabilty a and the worker plays L with probability b, what is outcome in the mixed strategy equilibrium? O a 3/4; b = 2/3 O None of the other answers are correct. O a 2/3; b = 3/4 O a 1/3; b= 1/2 O a 1/2; b= 1/3

Consider a simultaneous-choice game in which the principal can choose to delegate (D) or centralise (C) and a worker can opt for either low (L) or high (H) effort. The payoffs are (1, 2) if the choices are (D, L) to the principal and the agent, respectively. The payoffs are (3, 4) if the choices are (C, H). If either (C, L) or (D, H) are chosen, the payoffs are O to both players. If in the mixed strategy equilibrium, the principal plays D with probabilty a and the worker plays L with probability b, what is outcome in the mixed strategy equilibrium? O a 3/4; b = 2/3 O None of the other answers are correct. O a 2/3; b = 3/4 O a 1/3; b= 1/2 O a 1/2; b= 1/3

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

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