with probability 1-p When p = 1/4, which is a pure strategy Bayesian equilibrium: (1's strategy; 2's type - 2's strategy) (Right; Friend - Right, Foe - Right); (Left; Friend - Left, Foe - Left); (Left; Friend - Left, Foe - Right); O (Right; Friend - Left, Foe - Right);
with probability 1-p When p = 1/4, which is a pure strategy Bayesian equilibrium: (1's strategy; 2's type - 2's strategy) (Right; Friend - Right, Foe - Right); (Left; Friend - Left, Foe - Left); (Left; Friend - Left, Foe - Right); O (Right; Friend - Left, Foe - Right);
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter18: Auctions
Section: Chapter Questions
Problem 4MC
Related questions
Question
6.
![9.
●
There are two players.
●
The payoffs to player 2 depend on whether 2 is a friendly player (with probability p) or a foe (with probability 1 - p).
●
Player 2 knows if he/she is a friend or a foe, but player 1 doesn't know.
See the following payoff matrices for details.
Friend
Left
Right
Left
3,1
0,0
Right
2,1
1,0
with probability p
Foe
Right
Left
0,1
Right
1,1
probabili
1
Left
3,0
2,0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F855d745d-c863-473a-a0d7-bbee495bcf62%2F613de50d-c0a5-4f47-af49-513e3e573226%2Fare4nj7_processed.png&w=3840&q=75)
Transcribed Image Text:9.
●
There are two players.
●
The payoffs to player 2 depend on whether 2 is a friendly player (with probability p) or a foe (with probability 1 - p).
●
Player 2 knows if he/she is a friend or a foe, but player 1 doesn't know.
See the following payoff matrices for details.
Friend
Left
Right
Left
3,1
0,0
Right
2,1
1,0
with probability p
Foe
Right
Left
0,1
Right
1,1
probabili
1
Left
3,0
2,0
![with probability 1-p
When p = 1/4, which is a pure strategy Bayesian equilibrium:
(1's strategy; 2's type - 2's strategy)
(Right; Friend - Right, Foe - Right);
(Left; Friend - Left, Foe - Left);
(Left; Friend - Left, Foe - Right);
O (Right; Friend - Left, Foe - Right);](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F855d745d-c863-473a-a0d7-bbee495bcf62%2F613de50d-c0a5-4f47-af49-513e3e573226%2Fc8bu3pn_processed.png&w=3840&q=75)
Transcribed Image Text:with probability 1-p
When p = 1/4, which is a pure strategy Bayesian equilibrium:
(1's strategy; 2's type - 2's strategy)
(Right; Friend - Right, Foe - Right);
(Left; Friend - Left, Foe - Left);
(Left; Friend - Left, Foe - Right);
O (Right; Friend - Left, Foe - Right);
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