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In this game, P1 observes Nature's move, but P2 does not. With probability p, q, and 1-p-q, such that both p, q = (0, 1) (i.e. neither p nor q can be exactly 0 or 1), two players, P1 and P2, play the following games: p Nature 1-p-q P2 P2 P2 L R L R L R U 3,2 1,0 U 3,0 4,1 U 5,0 3,1 P1 P1 P1 Ꭰ 1,0 3,2 D 2,0 1,1 D 6,0 4,1 1. Draw the extensive form of this game (no need to write down the payoffs). 2. Identify the set of rationalizable strategy profiles. 3. For which values of p does this game has two Bayesian Nash equilibrium in pure strategies?

In this game, P1 observes Nature's move, but P2 does not. With probability p, q, and 1-p-q, such that both p, q = (0, 1) (i.e. neither p nor q can be exactly 0 or 1), two players, P1 and P2, play the following games: p Nature 1-p-q P2 P2 P2 L R L R L R U 3,2 1,0 U 3,0 4,1 U 5,0 3,1 P1 P1 P1 Ꭰ 1,0 3,2 D 2,0 1,1 D 6,0 4,1 1. Draw the extensive form of this game (no need to write down the payoffs). 2. Identify the set of rationalizable strategy profiles. 3. For which values of p does this game has two Bayesian Nash equilibrium in pure strategies?

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter16: Bargaining
Section: Chapter Questions
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In this game, P1 observes Nature's move, but P2 does not. With probability p, q, and 1-p-q, such that both p, q = (0, 1) (i.e. neither p nor q can be exactly 0 or 1), two players, P1 and P2, play the following games: p Nature 1-p-q P2 P2 P2 L R L R L R U 3,2 1,0 U 3,0 4,1 U 5,0 3,1 P1 P1 P1 Ꭰ 1,0 3,2 D 2,0 1,1 D 6,0 4,1 1. Draw the extensive form of this game (no need to write down the payoffs). 2. Identify the set of rationalizable strategy profiles. 3. For which values of p does this game has two Bayesian Nash equilibrium in pure strategies?
Transcribed Image Text:In this game, P1 observes Nature's move, but P2 does not. With probability p, q, and 1-p-q, such that both p, q = (0, 1) (i.e. neither p nor q can be exactly 0 or 1), two players, P1 and P2, play the following games: p Nature 1-p-q P2 P2 P2 L R L R L R U 3,2 1,0 U 3,0 4,1 U 5,0 3,1 P1 P1 P1 Ꭰ 1,0 3,2 D 2,0 1,1 D 6,0 4,1 1. Draw the extensive form of this game (no need to write down the payoffs). 2. Identify the set of rationalizable strategy profiles. 3. For which values of p does this game has two Bayesian Nash equilibrium in pure strategies?
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