There are two players, A and B. When A and B meet, each can decide to fight (F) or cave (C). Fighting is costly. It requires resources. If both choose to fight, fight occurs and each gets A gets , - c while B gets H who caves gets 0. In case both decide not to fight, i.e. both choose cave (C) each gets . - c. If only one, A or B, chooses to fight, then the one who chooses to fight gets 1 while the one
There are two players, A and B. When A and B meet, each can decide to fight (F) or cave (C). Fighting is costly. It requires resources. If both choose to fight, fight occurs and each gets A gets , - c while B gets H who caves gets 0. In case both decide not to fight, i.e. both choose cave (C) each gets . - c. If only one, A or B, chooses to fight, then the one who chooses to fight gets 1 while the one
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose t = 1 and c = 3/5, what is the payoff matrix for the game and state all Nash equilibria in pure strategies. Also find the unique Nash equilibirum in mixed strategies.

Transcribed Image Text:There are two players, A and B. When A and B meet, each can decide to fight (F) or cave (C). Fighting
is costly. It requires resources. If both choose to fight, fight occurs and each gets A gets ,
- c while B
- c. If only one, A or B, chooses to fight, then the one who chooses to fight gets 1 while the one
gets Hi
who caves gets 0. In case both decide not to fight, i.e. both choose cave (C) each gets .
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What is the unique Nash equilibirum in mixed strategies for the above question?
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