Consider the following simultaneous game.a.b.C.d.Player 1UPlayer 2L8,83,0R3,38,3What are the pure-strategy Nash equilibria? Identify.Find whether there are any mixed-strategy equilibria.Assume now the game above is being modified as a sequential game whereplayer 1 would move first and player 2 second. Find all Nash and subgameperfect equilibria for the game.Would a Nash equilibrium always be Pareto efficient? Use your answer in (a) toexplain.

There are two players : Player 1 & 2 Strategy Set of Player 2 : {L , R } Strategy Set of Player…

Answered: Consider the following simultaneous…

Consider the following simultaneous game. Player 1 U D Player 2 L 8,8 3,0 R 3,3 8,3 What are the pure-strategy Nash equilibria? Identify.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

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Question

Consider the following simultaneous game.
a.
b.
C.
d.
Player 1
U
Player 2
L
8,8
3,0
R
3,3
8,3
What are the pure-strategy Nash equilibria? Identify.
Find whether there are any mixed-strategy equilibria.
Assume now the game above is being modified as a sequential game where
player 1 would move first and player 2 second. Find all Nash and subgame
perfect equilibria for the game.
Would a Nash equilibrium always be Pareto efficient? Use your answer in (a) to
explain.

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