GAME THEORY

12.10 Purification: Consider the perturbed Matching Pennies game described in Section 12.5 and show that the Bayesian Nash equilibrium identified is the unique Bayesian Nash equilibrium. (Hint: Some insights can be gained by looking at the solution to the study group example in Section 12.2.2.) 12.5 Mixed Strategies Revisited: Harsanyi's Interpretation Consider the static game of Matching Pennies introduced in Chapter 6, given by the following matrix: Player 2 H T H 1. -1 -1, 1 Player 1 T -1. 1 1, -1 and recall that the unique mixed-strategy Nash equilibrium has each player playing heads with probability -. One reason this solution may be somewhat unappealing is that players are indifferent between # and 7, yet they are prescribed to randomize