The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer branded the chicken, whereas the one who does not veer gains peer-group esteem. Of course, if neither veers, both die in the resulting crash. Payoffs to the Chicken game are provided in the following table. Teen 1 Veer Does not veer Teen 2 Veer 2,2 3,1 Does not veer 1,3 0,0 a. Draw the extensive form. b. Find the pure-strategy Nash equilibrium or equilibria. c. Compute the mixed-strategy Nash equilibrium. As part of your answer, draw the best-response function diagram for the mixed strategies.
The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer branded the chicken, whereas the one who does not veer gains peer-group esteem. Of course, if neither veers, both die in the resulting crash. Payoffs to the Chicken game are provided in the following table. Teen 1 Veer Does not veer Teen 2 Veer 2,2 3,1 Does not veer 1,3 0,0 a. Draw the extensive form. b. Find the pure-strategy Nash equilibrium or equilibria. c. Compute the mixed-strategy Nash equilibrium. As part of your answer, draw the best-response function diagram for the mixed strategies.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer off is
branded the chicken, whereas the one who does not veer gains peer-group esteem. Of course, if neither veers, both die in the
resulting crash. Payoffs to the Chicken game are provided in the following table.
Teen 1
Veer
Does not veer
Teen 2
Veer
2,2
3, 1
Does
not veer
1,3
0,0
a. Draw the extensive form.
b. Find the pure-strategy Nash equilibrium or equilibria.
c. Compute the mixed-strategy Nash equilibrium. As part of your answer, draw the best-response function diagram for the
mixed strategies.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59e103a3-6bf8-4294-a82c-02330806f7e2%2F74825042-a58d-4f0f-b9c1-7e59c3e75927%2F6glf20k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer off is
branded the chicken, whereas the one who does not veer gains peer-group esteem. Of course, if neither veers, both die in the
resulting crash. Payoffs to the Chicken game are provided in the following table.
Teen 1
Veer
Does not veer
Teen 2
Veer
2,2
3, 1
Does
not veer
1,3
0,0
a. Draw the extensive form.
b. Find the pure-strategy Nash equilibrium or equilibria.
c. Compute the mixed-strategy Nash equilibrium. As part of your answer, draw the best-response function diagram for the
mixed strategies.
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