Consider a variant of the Bargaining game (Figure 1) in which me, even, and you by...

  

Transcribed Image Text:

Consider a variant of the Bargaining game (Figure 1) in which me, even, and you by player 1 correspond to offers of (2, 0), (1, 1), and (0, 2). As in the original example, if player 2 rejects an offer, then the players get (0, 0). (a) (10 pts) Write out the normal-form representation of the game and determine the set of pure- strategy Nash equilibria. (Hint: There should be nine.) (b) (10 pts) Determine the set of pure-strategy subgame-perfect equilibria (SPE). Show your work. (Hint: There is more than one SPE.) 1 even AAA Y (0,0) (1, 1) (0, 0) Figure 1: Variant of the Bargaining game. (2,0) me you Y (0, 2) N (0, 0) Consider a variant of the Bargaining game (Figure 1) in which me, even, and you by player 1 correspond to offers of (2, 0), (1, 1), and (0, 2). As in the original example, if player 2 rejects an offer, then the players get (0, 0). (a) (10 pts) Write out the normal-form representation of the game and determine the set of pure- strategy Nash equilibria. (Hint: There should be nine.) (b) (10 pts) Determine the set of pure-strategy subgame-perfect equilibria (SPE). Show your work. (Hint: There is more than one SPE.) 1 even AAA Y (0,0) (1, 1) (0, 0) Figure 1: Variant of the Bargaining game. (2,0) me you Y (0, 2) N (0, 0)

Answer rating: 100% (QA)

Since all of these strategy pa... View the full answer