Question: Game Theory, please solve the question 1 Kidnapping Game Consider the kidnapping game we studied in class. The players are a Terrorist and the Government.

Game Theory, please solve the question

Game Theory, please solve the question 1 Kidnapping Game Consider the kidnapping

1 Kidnapping Game Consider the kidnapping game we studied in class. The players are a Terrorist and the Government. The Terrorist moves rst, deciding whether to kidnap {K}, or not kidnap {NFC} a citizen. The kidnapping costs the Terrorist c :3- D. The Government subsequently moves, deciding whether to pay (P), or not pay (NP), the ransom1 R :3- D. {a} Draw the game tree, as we did in class. {h} Solve for the game's SPNE. [c] Now suppose that the government Eases a political cost, p :2- U, of not paying the ransom. 1What conditions on p imply that [KidnapJ Pay Ransom] is a SPNE? {d} How many suhgames does this game contain? What are they

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