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Find the relevant ranges for the value of x

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Reference no: EM133110166

Question: Here is a variation of the Adele VS Slayer game, in which one player is allowed to opt out. Player 1 first selects In (I) or Out (O). If player 1 selects O then the game ends with payoffs (x,1). If player 1 selects I, then players 1 and 2 play the Adele VS Slayer game. They each choose between A (Adele) and B (Slayer) simulta- neously and independently. If they coordinate on A then the payoffs are (3, 1). If they coordinate on B then the payoffs are (1, 3). If they fail to coordinate then they both get 0.

1. (a) Represent this game in both extensive and normal forms.

2. (b) What are the NE of this game, depending on the value of x? (Ignore the cases where x ties the payoffs)

Hint: Find the relevant ranges for the value of x, and treat each of these as a separate case. There will be three such cases.

3. (c) What are the SPE of this game, depending on the value of x? (Ignore the cases where x ties the payoffs)

Hint: Find the relevant ranges for the value of x, and treat each of these as a separate case. There will be three such cases

Reference no: EM133110166

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