(a) Represent this game in the extensive form, i.e. game tree. Let us consider a setting...

Transcribed Image Text:

(a) Represent this game in the extensive form, i.e. game tree. Let us consider a setting of Incomplete Information. Mia is able to observe the effectiveness of the Pfizer-BioNTech vaccine, which can be High (H) or Low (L). She works in the Pfizer labs and has participated in several studies related to the vaccine. However, Jack is unable to observe this information. He does not know if the effectiveness of Pfizer-BioNTech vaccine is High or Low. Assume the probability that the Pfizer-BioNTech vaccine is highly effective is p. First, Mia (after observing the vaccine effectiveness) chooses whether or not to get vaccinated. Then, Jack (after observing Mia's decision about the vaccine) decides whether or not to get the vaccine. If both get the vaccine, each of them receives a payoff of 10 when the vaccine is highly effective, (H) and 5 when its effectiveness is low, (L). If one of them gets vaccinated while the other does not, then the vaccinated friend is protected against Covid-19 and receives a payoff of 5 when H and 2 when L. The friend who does not get vaccinated receives a payoff of 0, independent of the vaccine effectiveness. Finally, if no one receives the vaccine they both obtain a payoff of -1. (a) Represent this game in the extensive form, i.e. game tree. Let us consider a setting of Incomplete Information. Mia is able to observe the effectiveness of the Pfizer-BioNTech vaccine, which can be High (H) or Low (L). She works in the Pfizer labs and has participated in several studies related to the vaccine. However, Jack is unable to observe this information. He does not know if the effectiveness of Pfizer-BioNTech vaccine is High or Low. Assume the probability that the Pfizer-BioNTech vaccine is highly effective is p. First, Mia (after observing the vaccine effectiveness) chooses whether or not to get vaccinated. Then, Jack (after observing Mia's decision about the vaccine) decides whether or not to get the vaccine. If both get the vaccine, each of them receives a payoff of 10 when the vaccine is highly effective, (H) and 5 when its effectiveness is low, (L). If one of them gets vaccinated while the other does not, then the vaccinated friend is protected against Covid-19 and receives a payoff of 5 when H and 2 when L. The friend who does not get vaccinated receives a payoff of 0, independent of the vaccine effectiveness. Finally, if no one receives the vaccine they both obtain a payoff of -1.

Answer rating: 100% (QA)

were dealing with an incomplete information game where Mia knows the effectiveness of the PfizerBioN... View the full answer