3. FALSE.The first-mover game always has an equilibrium, by backward induction, but having to commit and inform the other player of a pure strategy m ay be disadvantageous. At each stage ofthe game backward induction determines the optimal strategy of the player who makes the last move in the game. Then,the optimal action of the nextto-last moving player is determined, taking the last player's action as given. 4. Recall the Game of chicken from the previous problem set. If iames is the leaderin the game. then: (hint: you can draw the game tree to see it better} a. There are two equilibrium outcomes that coincide with the Nash equilibria. b.The unique equilibrium outcome is James playing Roaster and Buzz playing Chicken : Because Jam es [leader] will thinlc that if he play Chicken. Buzz's best response will be Rooster and if he play Rooster, his best response will be Chicken.Therefore. James moves backwards in his thinking and compares the payoffs of these two payoff [2,50] and (50.2}. James would select (50,2) that more benefit for him. c. The equilibrium outcome is the same as if Buzz were the leader. Part B 5. TelstraOptus a. Telstra's best response to Optus playing Low is Low (Payoff of Low is 2, payoff of High is -10}. Telstra's best response to Dptus playing Medium is Low [Payoff of Low is 13, payoff of High is 3). Telstra's best response to Dptus playing High is Low (Payoff of Low is '11", payoff of High is 13}. Optus's best response to Telstra playing Low is Low [Payoff of Low is 3, payoff of High is B]. Optus's best response to Telstra playing Medium is Low [Payoff of Loy.r is 10, payoff of High is 3]. Optus's best response to Telstra playing High is M edium [Payoff of Medium is 16, payoffs of High and Low is 9}. b. For Telstra, M edium and High are dominated strategies, and there are strictly dominated strategies. For Dptus, d E 6 High is strictly dominated by Low and Medium .[Low, Lowl is the pure Nash equilibrium in this game. . This game have unique Nash equilibrium as (Low, Low) by dominance. . If Telstra plays first row, then (Low, Low) is equilibrium outcome of this game. Telstra's leadership is advantage for Optus due to Optus do not have to choose between Low of Medium strategies. . {KEY QUESTION} Consider the following oneshot simultaneous game {three actions for each player is the maximum we will consider in this subject. but once you get on top of this,you will see that even large games are equally easy to solve): a. Before solving the game, put yourself in the position of Phil and write down your action.Then independent of that , put yourself in the position of Cindy and write clown your action