Question: Game Theory Question Question 2: Two players are fighting. Player 2 could be strong or weak. Player 1 does not know whether the opponent is

Game Theory Question

Game Theory Question Question 2: Two players are fighting. Player 2 could

Question 2: Two players are fighting. Player 2 could be strong or weak. Player 1 does not know whether the opponent is strong or weak; he assigns probability 0 to player 2 being strong. Player 2 is fully informed. Each player can either fight or surrender. Each player's payoff is 0 if he surrenders (regardless of the action of the other player) and 2 if he fights and the opponent surrenders; if both players fight then the payoffs are (-2, 2) if player 2 is strong and (2, -2) if player 2 is weak. Formulate this situation as a Bayesian game and find one Bayesian Nash equilibrium

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