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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