Two rival firms -- Firm 1 (Playerl) and Firm 2 (Player 2) are deciding simultaneously on...

 

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Two rival firms -- Firm 1 (Playerl) and Firm 2 (Player 2) are deciding simultaneously on the location to launch their latest products. Each of them can choose to launch their product in either the Red State (action R) or the Blue State (action B). A new initiative of boosting the economy in the Red State may take place, which will change the payoffs to the firms. Firm 2 only knows that there is a probability of 1/2 that the initiative will be carried out. Firm 1, on the other hand, has insider information and knows exactly whether there will be an initiative. The payoffs are as follows: R В R 0,0 0, 4 B 4, 0 2, 2 No Initiative, probability 1/2 R В R 6, 6 6, 4 B 4, 6 2, 2 Boost in red State, probability 1/2 --- The ex-ante normal form associated with this Bayesian game is: O A. R В RR 3, 3 3, 4 RB 2, 3 1, 3 BR 5, 3 4, 3 BB 4, 3 2, 2 R в RR 3, 3 3, 4 RB 2, 3 1, 3 BR 4, 3 5, 3 BB 4, 3 2, 2 R B RR 3, 3 3, 4 RB 5, 3 3, 4 BR 2, 3 1, 3 BB 4, 3 2, 2 D. R B RR 3, 3 3, 4 RB 1, 3 2, 3 BR 5, 3 4, 3 BB 4, 3 2, 2 B. Two rival firms -- Firm 1 (Playerl) and Firm 2 (Player 2) are deciding simultaneously on the location to launch their latest products. Each of them can choose to launch their product in either the Red State (action R) or the Blue State (action B). A new initiative of boosting the economy in the Red State may take place, which will change the payoffs to the firms. Firm 2 only knows that there is a probability of 1/2 that the initiative will be carried out. Firm 1, on the other hand, has insider information and knows exactly whether there will be an initiative. The payoffs are as follows: R В R 0,0 0, 4 B 4, 0 2, 2 No Initiative, probability 1/2 R В R 6, 6 6, 4 B 4, 6 2, 2 Boost in red State, probability 1/2 --- The ex-ante normal form associated with this Bayesian game is: O A. R В RR 3, 3 3, 4 RB 2, 3 1, 3 BR 5, 3 4, 3 BB 4, 3 2, 2 R в RR 3, 3 3, 4 RB 2, 3 1, 3 BR 4, 3 5, 3 BB 4, 3 2, 2 R B RR 3, 3 3, 4 RB 5, 3 3, 4 BR 2, 3 1, 3 BB 4, 3 2, 2 D. R B RR 3, 3 3, 4 RB 1, 3 2, 3 BR 5, 3 4, 3 BB 4, 3 2, 2 B.

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Consider the given information Firm 2 knows that probability of 12 Firm 2 will get an ... View the full answer