Question: 4 Max and Alex have each deposited the same amount, $D, into the Wonderland Bank (WB). Since Max and Alex are the only two investors,

4 Max and Alex have each deposited the same amount, $D, into the Wonderland Bank (WB). Since Max and Alex are the only two investors, the initial total 1n the WB 15 $2D. Money 1n the WB grows over time. By period 1, the total money in the WB will 1ncrease to 2r. If the WB survives to period 2, the money will increase to 2R. Assume R > r > D. In period 1, each depositor can either withdraw or not withdraw his money. (He cannot withdraw just part of it). These choices are made simultaneously. If either of them withdraws, the WB goes bust. If just one person withdraws in period 1, the withdrawer gets $(2r D). In this case, the nonwithdrawer gets only his initial deposit $D. If both withdraw in period 1, each gets $r. If neither of them withdraws in period 1 then they move into period 2. Once again, each of them can either withdraw or notwithdraw their money. As before, these choices are made simultaneously. The WB closes down at the end of period 2 regardless. If just one person withdraws in period 2, the withdrawer gets $(2RD), and the nonwithdrawer gets $D. If neither withdraw in period 2 or if both withdraw in period 2, each gets $R. (d) Write out the extensiveform (game tree) of this game taking care to indicate what nodes lie in the same information sets. (e) Consider two cases. Where 2r D > R, and where 2r D
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