Question: Consider a two player sequential move game where each player

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 $ 25. If both players move left, player 1 receives $ 5 and player 2 receives $ 10. If player 1 moves left and player 2 moves right, player 1 receives $ 20 and player 2 receives $ 20.
a. Write the above game in extensive form.
b. Find the Nash equilibrium outcomes to this game.
c. Which of the equilibrium outcomes is most reasonable? Explain.

View Solution:

Sale on SolutionInn
  • CreatedApril 18, 2014
  • Files Included
Post your question