Once your producers understand the “I WANT $3” game, you will present the “I WANT TO BE A MILLIONAIRE” game. Its rules are:There are two contestants/opponents (who do not know each other and cannot communicate with each other during the game).Each player is given $1 million at the start of the game.Independently and simultaneously, each player must choose to add to their award $0, $1, $2, $3, $4, ……$999,999, or $1,000,000. Doing so decreases the other player’s award by twice that amount.Each player ends the game with a payoff based on their initial one million, the additional amount that they announced, and the reduction due to the opponent’s announcement.The game matrix for this expanded game has 1,000,001 rows, 1,000,001 columns, and 1,000,002,000,001 pairs of payoffs. I STRONGLY RECOMMEND THAT YOU DO NOT DRAW IT! But building on what you learned in part (a), answer the following two questions:i) What is the Nash equilibrium of this game? ii) What are the Nash equilibrium payoffs for the players in this game? iii) Is there a strictly dominant strategy for either player? If not, explain why not. If so, identify it. iv) Do you have a future in TV game shows?

Given: a player’s final prize amount is: (initial $3) + (their choice of $0, $1, $2, $3, ...... and…

Answered: Once your producers understand the “I…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Once your producers understand the “I WANT $3” game, you will present the “I WANT TO BE A MILLIONAIRE” game. Its rules are:

- There are two contestants/opponents (who do not know each other and cannot communicate with each other during the game).
- Each player is given $1 million at the start of the game.
- Independently and simultaneously, each player must choose to add to their award $0, $1, $2, $3, $4, ……$999,999, or $1,000,000. Doing so decreases the other player’s award by twice that amount.
- Each player ends the game with a payoff based on their initial one million, the additional amount that they announced, and the reduction due to the opponent’s announcement.

The game matrix for this expanded game has 1,000,001 rows, 1,000,001 columns, and 1,000,002,000,001 pairs of payoffs. I STRONGLY RECOMMEND THAT YOU DO NOT DRAW IT! But building on what you learned in part (a), answer the following two questions:

i) What is the Nash equilibrium of this game?

ii) What are the Nash equilibrium payoffs for the players in this game?

iii) Is there a strictly dominant strategy for either player? If not, explain why not. If so, identify it.

iv) Do you have a future in TV game shows?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 6 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions