Two people are quarreling over a resource. Person 2 does not know whether Person 1 is weak or strong. She assigns a probability of p to Person 1 being strong. Person 1 knows exactly how strong both people are. Each person must choose to fight or to yield without knowing whether the other player will fight or yield. A person who yields will get a payoff of 0, no matter what the other person does. If either person fights and the other yields, the person who fights will get a payoff of 1. If both players fight, then: (a) if Player 1 is weak, Player 2 will get a payoff of 1 and Player 1 will get -2 (b) if Player 1 1 is strong, Player 2 will get a payoff of -2 and Player 1 will get a payoff of 1.

E) Suppose that player 2 chooses the strategy Fight. What is the best response for Player 1?

F) If Player 1 fights if strong and yields if weak, what is the expected payoff to Player 2 from playing the strategy Fight?

G) For what values of p is there a Bayes-Nash equilibrium in which Player 2 fights and Player 1 fights if strong and yields if weak? Explain your answer.

Answer rating: 100% (QA)

E Player 1s best response is to fight Lets say the probability that Player 2 is weak is p If Player ... View the full answer