For the game in FIGURE 7.6, derive players’ best-reply functions, plot them as shown in Figure 7.5, and find the Nash equilibrium.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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For the game in FIGURE 7.6, derive players’ best-reply functions, plot them as shown in Figure 7.5, and find the Nash equilibrium.

FIGURE 7.5 Nash Equilibrium for the Police Patrol
and Drug Trade Game
1
BRDD(d)
BRPO(d)
d
d*
13
5
1
p* =
13
Transcribed Image Text:FIGURE 7.5 Nash Equilibrium for the Police Patrol and Drug Trade Game 1 BRDD(d) BRPO(d) d d* 13 5 1 p* = 13
FIGURE 7.6
Player 2
Left
Right
Тop
8,2
1,6
Player 1
Bottom
3,5
4,1
Transcribed Image Text:FIGURE 7.6 Player 2 Left Right Тop 8,2 1,6 Player 1 Bottom 3,5 4,1
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