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3. Two agents, namely House and Cuddy get into a 2-stage war of attrition in which at each stage they can fight or quit. If

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3. Two agents, namely House and Cuddy get into a 2-stage war of attrition in which at each stage they can fight or quit. If both of them quits immediately in the first stage, then the interaction terminates and both House and Cuddy get 0 payoff. If one of them fights but the other one quits, then the interaction also terminates, while fighting party gets a payoff of 5, the quiting party gets 0. If both of them fights, then both seperately incurs a cost of -2 and move to the second stage of the interaction, in which they can fight or quit. The same rules apply with the difference that even if they both fight the interaction terminates. Each agent's total payoff is the sum of his/her payoff from each stage of the inter- action that is reached. a. Formulate this interaction as an extensive form game. (Draw the game tree and formally define the components of the game) b. Consider the second stage game as a normal from game and find its all pure strategy Nash equilibria. c. Find all the subgame-perfect Nash equilibrium of the extensive form game you

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