Player 2 L C R T 2,0 1, 1 4, 2 Player 1 M 3,4 1,2 2,3 B 1,3 0,2 3,0 4. Consider the following static game in which Player 1 has three actions: T, M, B; and Player 2 has three actions: L, C, R. (a) Find the two Nash equilibria of this game. (b) Consider an alteration of the game. Action B is no longer available to Player 1, and Action R is no longer available to Player 2. When Player 2 plays L, Player 1 gets 5 instead of 2 when he plays T. Also, Player 1 will move first, and Player 2 will move second after observing Player l's move. Draw the game tree of this altered game and find the sub-game perfect equilibrium.

Player 2 L C R T 2,0 1, 1 4, 2 Player 1 M 3,4 1,2 2,3 B 1,3 0,2 3,0 4. Consider the following static game in which Player 1 has three actions: T, M, B; and Player 2 has three actions: L, C, R. (a) Find the two Nash equilibria of this game. (b) Consider an alteration of the game. Action B is no longer available to Player 1, and Action R is no longer available to Player 2. When Player 2 plays L, Player 1 gets 5 instead of 2 when he plays T. Also, Player 1 will move first, and Player 2 will move second after observing Player l's move. Draw the game tree of this altered game and find the sub-game perfect equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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