Question: Consider the following static game: Consider the following static game: Donald a 3,2 2,1 2,5 Claire b 2,0 2,2 0,1 c 4,3 7,1 1,3 (a)

Consider the following static game:

Consider the following static game: Consider the following static game: Donald a

Consider the following static game: Donald a 3,2 2,1 2,5 Claire b 2,0 2,2 0,1 c 4,3 7,1 1,3 (a) Solve the game with iterated strict dominance. ( 8 marks) (b) Construct an epistemic model such that, for every choice found in (a) there exists a type such that: t the choice is optimal for the type, 0 and the type expresses common belief in rationality. (10 marks) ((1) For each of Claire's types in the epistemic model constructed in (a), write down the first five layers of the induced belief hierarchy. ( 7 marks)

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