Which of the equilibrium outcomes is most reasonable

Assignment Help Econometrics

Reference no: EM13199138

Consider a two-player, sequential-move game where each player can choose to play right or left. Player 1 moves first. Player 2 observes player 1's actual move and then decides to move right or left. If player 1 moves right, player 1 receives $0 and player 2 receives $15. If both players move left, player 1 receives -$10 and player 2 receives $8. If player 1 moves left and player 2 moves right, player 1 receives $10 and player 2 receives $10.

a. Write the above game in extensive form.
b. Find the Nash equilibrium outcomes to this game.
c. Which of the equilibrium outcomes is most reasonable? Explain.

Reference no: EM13199138

Questions Cloud

Describe the profit-maximizing quantity : A firm that sells e-books – books in digital form downloadable from the Internet – sells all e-books relating to do-it-yourself topics home plumbing, gardening, and so on at the same price.

State the ongoing moral development : Many critics claim that this portion of the book stops the ongoing moral development that Huck has had to undergo during the course of the novel and he becomes a side character as Tom dominates.

Major categories of hazards associated with terrorism : Analyze two of the five major categories of hazards associated with terrorism. Be sure to include which type of attack would be most logical to conduct in the United States and why?

Traditional hazard and terrorist-related hazards : Discuss two major differences between a traditional hazard such as the 2007 California Wildfires and the terrorist-related hazards associated with the Aum Shinrikyo Sarin Gas attack on the Tokyo Subway that occurred in March of 1995.

Which of the equilibrium outcomes is most reasonable : If player 1 moves right, player 1 receives $0 and player 2 receives $15. If both players move left, player 1 receives -$10 and player 2 receives $8. If player 1 moves left and player 2 moves right, player 1 receives $10 and player 2 receives $10.

Explain moral and cognitive changes : Review the major physical, moral, and cognitive changes that occur in adolescence discussed in Module 27 of Psychology and Your Life. Erikson's chart on page 313 shows the psychosocial development stage during adolescence.

Identify key inflection points in the companys stock price : Select a puplicly listed company of your choosing. Identify key inflection points in the company's stock price going back three years. Analysis and discuss the impact of the various events which lead to these stock price movements.

Find each players dominant strategy : In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $500. If both players choose strategy B, each earns a payoff of $100.

Explain the violation of u.s. antitrust laws : Suppose that a business has developed a very high-quality product and operates more efficiently in producing that product than any other potential competitor.

User Account

All Pages