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Beer-Quiche Game, Game Theory 3. Consider the following Beer-Quiche game: 0, 1 2,0 1,0 3, 1 f B ~fB 2 JB ~fB . . .

Beer-Quiche Game, Game Theory

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3. Consider the following Beer-Quiche game: 0, 1 2,0 1,0 3, 1 f B ~fB 2 JB ~fB . . . B $(.8) N w(.2) B 2 . . . . fo ~fQ fQ ~fQ 1, 1 3,0 0, 0 2, 1 (a) Are there any separating equilibria to this Beer-Quiche game? Show your work. (20 pts.) (b) Is there a pooling equilibria where the weak-type drinks beer? Assume the Bully (Player 2) believes that only weaklings will eat quiche: p(w|Q) = 1. Show your work. (20 pts.) (c) Bonus: Describe what the Bully (Player 2) must believe in order to sustain a pooling equilibrium where the strong-type eats quiche. (+5 pts.)

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