Player 1 is an Internet service provider and Player 2 is a potential customer. They consider entering into a contract of service for a period of time. The provider decides between two levels of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the potential customer calls customer service, the Internet service provider makes the initial offer.The potential customer then decides whether to Buy or Not Buy. Let’s say that the interaction ends after the potential customer makes their decision.Please set up the extensive form according to the following outcomes:i. If the Internet service provider offers Low and the potential customer doesn’t buy, they both make off with 1.ii. If the Internet service provider offers Low and the potential customer buys, the Internet service provider makes off with 3, and the customer receives 0.iii. If the Internet service provider offers High and the potential customer doesn’t buy, the Internet service provider makes off with 0, and the customer receives 1. Player 1 is an Internet service provider and Player 2 is a potential customer. They considerentering into a contract of service for a period of time. The provider decides between two levelsof service: High or Low. The potential customer decides whether to Buy or Not Buy. When thepotential customer calls customer service, the Internet service provider makes the initial offer.The potential customer then decides whether to Buy or Not Buy. Let's say that the interactionends after the potential customer makes their decision.Please set up the extensive form according to the following outcomesi. If the Internet service provider offers Low and the potential customer doesn'tbuy, they both make off with 1.ii. If the Internet service provider offers Low and the potential customer buys, theInternet service provider makes off with 3, and the customer receives 0.iii. If the Internet service provider offers High and the potential customer doesn'tbuy, the Internet service provider makes off with 0, and the customer receives 1.

Extensive Form Game is defined as a specific kind of game in game theory which explicitly represents…

Answered: Player 1 is an Internet service…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Player 1 is an Internet service provider and Player 2 is a potential customer. They consider entering into a contract of service for a period of time. The provider decides between two levels of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the potential customer calls customer service, the Internet service provider makes the initial offer.
The potential customer then decides whether to Buy or Not Buy. Let’s say that the interaction ends after the potential customer makes their decision.

Please set up the extensive form according to the following outcomes:

i. If the Internet service provider offers Low and the potential customer doesn’t buy, they both make off with 1.

ii. If the Internet service provider offers Low and the potential customer buys, the Internet service provider makes off with 3, and the customer receives 0.

iii. If the Internet service provider offers High and the potential customer doesn’t buy, the Internet service provider makes off with 0, and the customer receives 1.

Player 1 is an Internet service provider and Player 2 is a potential customer. They consider
entering into a contract of service for a period of time. The provider decides between two levels
of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the
potential customer calls customer service, the Internet service provider makes the initial offer.
The potential customer then decides whether to Buy or Not Buy. Let's say that the interaction
ends after the potential customer makes their decision.
Please set up the extensive form according to the following outcomes
i. If the Internet service provider offers Low and the potential customer doesn't
buy, they both make off with 1.
ii. If the Internet service provider offers Low and the potential customer buys, the
Internet service provider makes off with 3, and the customer receives 0.
iii. If the Internet service provider offers High and the potential customer doesn't
buy, the Internet service provider makes off with 0, and the customer receives 1.

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