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Use the following payoff matrix for a simultaneous-move one-

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Use the following payoff matrix for a simultaneous-move one-shot game to answer the accompanying questions.
Player 2
Strategy C D E F
Player 1 A 25, 15 4, 20 16, 14 28, 12
B 10, 10 5, 15 8, 6 18, 13
a. What is player 1's optimal strategy? Why?
b. Determine player 1's equilibrium payoff.

Consider a two-player, sequential-move game where each player can choose to play right or left. Player 1 moves first. Player 2 observes player 1's actual move and then decides to move right or left. If player 1 moves right, player 1 receives \$0 and player 2 receives \$15. If both players move left, player 1 receives - \$10 and player 2 receives \$8. If player 1 moves left and player 2 moves right, player 1 receives 10 and player 2 receives \$10.
a. Write the above game in extensive form.
b. Find the ash equilibrium outcomes to this game.
c. Which of the equilibrium outcomes is most reasonable? Explain.

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Solution Preview

Use the following payoff matrix for a simultaneous-move one-shot game to answer the accompanying questions.
Player 2
Strategy C D E F
Player 1 A 25, 15 4, 20 16, 14 28, 12
B 10, 10 5, 15 8, 6 18, 13
a. What is player 1's optimal strategy? ...

Solution Summary

Use the following payoff matrix for a simultaneous-move one-shot game to answer the accompanying questions.
Player 2
Strategy C D E F
Player 1 A 25, 15 4, 20 16, 14 28, 12
B 10, 10 5, 15 8, 6 18, 13
a. What is player 1's optimal strategy? Why?
b. Determine player 1's equilibrium payoff.

Consider a two-player, sequential-move game where each player can choose to play right or left. Player 1 moves first. Player 2 observes player 1's actual move and then decides to move right or left. If player 1 moves right, player 1 receives \$0 and player 2 receives \$15. If both players move left, player 1 receives - \$10 and player 2 receives \$8. If player 1 moves left and player 2 moves right, player 1 receives 10 and player 2 receives \$10.
a. Write the above game in extensive form.
b. Find the ash equilibrium outcomes to this game.
c. Which of the equilibrium outcomes is most reasonable? Explain.

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