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2. Consider the following game. Player 1 is either Friendly (with probability 2/3) or Mean (with probability 1/3), and decides to Smile or Not Smile.
2. Consider the following game. Player 1 is either "Friendly" (with probability 2/3) or "Mean" (with probability 1/3), and decides to Smile or Not Smile. A Friendly type has no cost of smiling, but a Mean type has a cost of4. Player 2 decides to Ask or Not ask Player 1 for help. If Player 2 does not ask Player 1 for help, both players get 0 (minus any cost of smiling for 1). If Player 2 asks a Friendly Player 1 for help, both players get +3 units of utility. If Player 2 asks a Mean Player 1 for help, Player 2 gets -3 units of utility while Player 1 gets +3 units of utility (minus any cost of smiling) because he gets a chance to be mean to the other player. Player 2 does not know if] is Friendly or Mean (but Player 1 does). (a) (12 points) Suppose Player 2 does not see whether Player 1 is smiling when he's deciding whether to ask for help. Draw the extensive form, and solve the game using the appropriate solution concept. (b) (20 points) Now suppose Player 2 sees whether Player 1 is smiling when he's deciding whether to ask for help. Draw the extensive form, and solve the game using the appropriate solution concept. (c) (3 points) Compare player's expected payoffs in (a) and (b) and briefly interpret
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