Question
Consider a game in which two students simultaneously choose effort levels span style=font-family: CambriaMath;font-size:8pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;>, span style=font-family: CambriaMath;font-size:8pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;> [0, 1] in studying for an exam. The
Consider a game in which two students simultaneously choose effort levels span style="font-family: CambriaMath;font-size:8pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;">, span style="font-family: CambriaMath;font-size:8pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;"> [0, 1] in studying for an exam. The exam is graded on a curve and effort directly determines performance, so the student who works harder will get an A and the other student will get a B. If the students exert identical effort assume that they both get B's. Assume that each student receives one extra util from getting an A instead of a B and a disutility of 22 utils from expending effort span style="font-family: ;font-size:12pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;"> Find a mixed strategy Nash equilibrium of this game. Check also that there are no other Nash equilibria.
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