Question: 2. Two players select a policy that affects them both my alternatively vetoing policies until only one remains. First, player 1 vetoes a policy. If

 2. Two players select a policy that affects them both my

2. Two players select a policy that affects them both my alternatively vetoing policies until only one remains. First, player 1 vetoes a policy. If more than one policy remains, player 2 then vetoes a policy. If more than one policy still remains, player 1 then vetoes another policy. The process continues until a single policy remains unvetoed. Suppose there are three possible policies: A, B and C. Player 1 prefers A to B to C, and player 2 prefers to B to A to C. The payoffs of players are as follows: If policy A is chosen, player 1's payoff is 5 and player 2's payoff is 3. If policy B is chosen, player 1's payoff is 4 and player 2's payoff is 10. If policy C is chosen, player 1's payoff is 2 and player 2's payoff is 0. . a. Draw the game tree, with payoffs, for this two-person game. b. What is the rollback equilibrium to this game? Make sure to describe the strategies, not just the payoffs. How many different complete strategies does player 1 and player 2 have? Explain. List out all of the pure strategies for each player. c. 2. Two players select a policy that affects them both my alternatively vetoing policies until only one remains. First, player 1 vetoes a policy. If more than one policy remains, player 2 then vetoes a policy. If more than one policy still remains, player 1 then vetoes another policy. The process continues until a single policy remains unvetoed. Suppose there are three possible policies: A, B and C. Player 1 prefers A to B to C, and player 2 prefers to B to A to C. The payoffs of players are as follows: If policy A is chosen, player 1's payoff is 5 and player 2's payoff is 3. If policy B is chosen, player 1's payoff is 4 and player 2's payoff is 10. If policy C is chosen, player 1's payoff is 2 and player 2's payoff is 0. . a. Draw the game tree, with payoffs, for this two-person game. b. What is the rollback equilibrium to this game? Make sure to describe the strategies, not just the payoffs. How many different complete strategies does player 1 and player 2 have? Explain. List out all of the pure strategies for each player. c

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!