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

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.

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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