Consider the following story: Charlie finds two fifty-pence pieces on the floor. His friend Dylan is standing next to him when he finds them. Chris can offer Dylan nothing at all, one of the fifty-pence pieces, or both. Dylan observes the offer made by Charlie, and can either accept the offer (in which case they each receive the split specified by Charlie) or reject the offer. If he rejects the offer, each player gets nothing at all (because Charlie is embarassed and throws the money away). (a) Formulate this interaction as an extensive-form game. To keep things simple, players’ payoff is equal to their monetary gain. (b) List all histories of the game. Split these into terminal and non-terminal histories. (c) What are the strategies available to Charlie? What are the strategies available to Dylan? Draw the strategic-form game. (d) Find the pure-strategy Nash equilibria of this game. (e) What do you think will happen?
Consider the following story:
Charlie finds two fifty-pence pieces on the floor. His friend Dylan is standing next to him when he finds them. Chris can offer Dylan nothing at all, one of the fifty-pence pieces, or both. Dylan observes the offer made by Charlie, and can either accept the offer (in which case they each receive the split specified by Charlie) or reject the offer.
If he rejects the offer, each player gets nothing at all (because Charlie is embarassed and throws the money
away).
(a) Formulate this interaction as an extensive-form game. To keep things simple, players’ payoff is equal to their monetary gain.
(b) List all histories of the game. Split these into terminal and non-terminal histories.
(c) What are the strategies available to Charlie? What are the strategies available to Dylan? Draw the strategic-form game.
(d) Find the pure-strategy Nash equilibria of this game.
(e) What do you think will happen?
Step by step
Solved in 2 steps with 1 images
Hello, please help me to solve part (d) and (e):
Charlie finds two fifty-pence pieces on the floor. His friend Dylan is standing next to him when he finds them. Chris can offer Dylan nothing at all, one of the fifty-pence pieces, or both. Dylan observes the offer made by Charlie, and can either accept the offer (in which case they each receive the split specified by Charlie) or reject the offer.
If he rejects the offer, each player gets nothing at all (because Charlie is embarassed and throws the money
away).
(a) Formulate this interaction as an extensive-form game. To keep things simple, players’ payoff is equal to their monetary gain.
(b) List all histories of the game. Split these into terminal and non-terminal histories.
(c) What are the strategies available to Charlie? What are the strategies available to Dylan? Draw the strategic-form game.
(d) Find the pure-strategy Nash equilibria of this game.
(e) What do you think will happen?
by Bartleby Expert
