2. Consider two players playing a simultaneous moves game. These players can be one of the two states of the world, state 1 or state 2, while playing the game. The payoffs-matrix for the two state games are as follows: State 1 L P1 U D P2 M State 2 L P1 U D P2 R 1,4 1,0 1,6 2,16 0,0 0,24 Each players believes that the two states are equally likely. Derive the BNE of the game. M R 1,0 0,0 1,4 1,6 2,16 0,24

2. Consider two players playing a simultaneous moves game. These players can be one of the two states of the world, state 1 or state 2, while playing the game. The payoffs-matrix for the two state games are as follows: State 1 L P1 U D P2 M State 2 L P1 U D P2 R 1,4 1,0 1,6 2,16 0,0 0,24 Each players believes that the two states are equally likely. Derive the BNE of the game. M R 1,0 0,0 1,4 1,6 2,16 0,24

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.7P

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