Econ 402: Strategy

Dr. Dre and Eminem are going to a party and must decide if they should dress in casual or formal attire. Their payoffs are listed in the table below. In this situation, there are no PSNE. The MSNE is that Eminem will dress casual with probability .5 and formal with probability .5. Dr. Dre will dress casual with probability 3/5 and formal with probability 2/5. Dr. Dre casual formal casual 4,1 2,5 Eminem formal 2,6 5,2 Assume now that there is new information about who will be attending the party. Dr. Dre and Eminem get this information before making their sartorial choices for the party and the new payoff table looks like this: Question: What will Eminem's new mixed strategy look like if his payoffs are represented in the table below? Explanation of your method and calculations is required to receive full credit. Dr. Dre casual formal Casual 4,1 2,5 Eminem formal 4,6 10.2 O