Question: Consider the following interaction between two players: Each player puts down a coin simultaneously, with either heads or tails facing up. If the two players'
Consider the following interaction between two players: Each player puts down a coin simultaneously, with either heads or tails facing up.
If the two players' coins match (i.e. if both coins show heads or if both coins show tails), then player 1 pays $1 to player 2. If the coins do not match,
then player 2 pays $1 to player 1. Assume that each player's payoff is equal to the amount of money she pays or receives (e.g. if the coins match, then player 1's payoff is 1, and player 2's payoff is 1).
a. Identify the players' action sets and strategy sets, i.e. write down the available actions and strategies for both players.
b. Represent this game in normal form.
c. Based on your representation from part (b), depict all possible extensive-form representations of this game. If there is more than
one extensive-form representation of it, explain why they are strategically equivalent.
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