What should be the dinosaur value to make you exactly

Reference no: EM133714358

Question: Consider a "Dinosaur hunt" game with three players. The game operates similarly to the stag hunt game: any player can either play "Hare" (H) and earn a payoff of 2 (independently of others' actions) or play "Dinosaur" (D) and earn a payoff of 6 if both other players choose D (otherwise, D yields 0). The game is played in the infinitely repeated manner with discounting δ=1/2. Now suppose you are playing the game with two other players who are playing an identical strategy with two rules: (i) by default, each period a player randomizes between D and H (50/50); (ii) in case a dinosaur is "caught" (payoff of 6 is received), choose H in the next period, then switch back to (i). a) Calculate your expected payoff (a single number) from playing "Always D" strategy. b) Is it better to play "Always D" or "Always H"? c) What should be the dinosaur value to make you exactly indifferent between strategies in (b)?

Reference no: EM133714358

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