Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
A9.
![Consider the following game. Find one pure strategy PBE.
1
L
R
[A₁]
r
O
7
[2] 2
r
[1₂]
1
3 [μ3]
u
[μ₁]
1
1
0
u
d
d
d
u
d
0
1
2
0
-1
-1
2
0
0 0
0
0
0
1
0
0
0
1
1
0
0
1 1 3
0
1
HINT: There are 3 pure strategy PBEs: one where 1 plays L, one where 1 plays C and one where
1 plays R. You just need to find one PBE.
r](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2af58d34-4236-41fa-83ff-2a8e9bb42c7b%2F626f26c7-5193-4860-b7d3-a2e4534cb1a5%2F1l0frnn_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the following game. Find one pure strategy PBE.
1
L
R
[A₁]
r
O
7
[2] 2
r
[1₂]
1
3 [μ3]
u
[μ₁]
1
1
0
u
d
d
d
u
d
0
1
2
0
-1
-1
2
0
0 0
0
0
0
1
0
0
0
1
1
0
0
1 1 3
0
1
HINT: There are 3 pure strategy PBEs: one where 1 plays L, one where 1 plays C and one where
1 plays R. You just need to find one PBE.
r
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