1. The accompanying figure is a cheap talk game in which the sender has two possible...

 

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1. The accompanying figure is a cheap talk game in which the sender has two possible types- denoted t1 and t2-and can choose one of two possible messages denoted m1 and m2. After observing the sender's message, the receiver chooses from amongst three possible actions: a, b, and c. Nature Probability = 4 Probability = .6 Sender m₁ m₂ m₁ m₂ Receiver 9 9 a/b Sender 4 2 4 2 2 03 2 Receiver 3 4 0 34 0 4 1 5 4 (a) Find a separating perfect Bayes-Nash equilibrium. (b) Find a pooling perfect Bayes-Nash equilibrium. O 9 0 3 15 1. The accompanying figure is a cheap talk game in which the sender has two possible types- denoted t1 and t2-and can choose one of two possible messages denoted m1 and m2. After observing the sender's message, the receiver chooses from amongst three possible actions: a, b, and c. Nature Probability = 4 Probability = .6 Sender m₁ m₂ m₁ m₂ Receiver 9 9 a/b Sender 4 2 4 2 2 03 2 Receiver 3 4 0 34 0 4 1 5 4 (a) Find a separating perfect Bayes-Nash equilibrium. (b) Find a pooling perfect Bayes-Nash equilibrium. O 9 0 3 15

Answer rating: 100% (QA)

Solution a With a separating equilibrium the sender chooses distinct messages so let us presume that ... View the full answer