Question: ECON3012 Strategic behaviour Q3 (34 points) Consider the informational cascade game that we learned in class. A sequence of travellers are choosing a path, left

ECON3012 Strategic behaviour

Q3 (34 points) Consider the informational cascade game that we learned in class. A sequence of travellers are choosing a path, left {L} or right (R), one by one. They don't know which path is correct but they share the common prior belief Pr[L is correct) = 1-,. The decision rule for the travellers is choosr: L if Pr (L is correct) > 0.6 ip a coin if Pr (L is correct) = 0.6 choose R if Pr (L is correct)

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