Karl and Juanita are seniors attending the same high school and are in the midst of making decisions about which college to attend. Both could attend either a big state university or a small liberal arts college. Karl has a preference for the big state university because many of his friends are attending there, and Juanita has a preference for the small liberal arts college because it has a highly ranked marine biology program. They will make independent decisions about which college to attend because of financial and academic reasons, however, information about their relationship impacts their school preference. If they want to be a couple, they would prefer to be at the same institution even if it is someone’s second choice. But, alas, as with many high school couples, neither really knows if the other wants the relationship to continue beyond the end of the school year.

Modify the College Choices Bayesian game by interchanging the values of ϕ_J (K_a |J_b ) and ϕ_J (K_b |J_b ).

Required:

a. Describe the difference between the beliefs of the two types of Juanita.

b. Show that the new belief functions cannot arise from a common prior.

c. Find the Bayesian equilibria. 

Hint: Very little changes in the analysis done on the original College Choices Bayesian game.

Answer rating: 100% (QA)

a In the original College Choices Bayesian game both types of Juanita had the belief that if Karl prefers the big state university then he would atten... View the full answer