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game theory (4) Consider Bank Run problem from class. There are 10 savers. Each chooses whether to withdraw their money from the bank or not.

game theory

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(4) Consider Bank Run problem from class. There are 10 savers. Each chooses whether to withdraw their money from the bank or not. So long as 6 or more savers leave their money in the bank, the bank remains solvent and each saver (who left their money in the bank) receives a payoff of 2. For those who withdrew their money, they receive a payoff of O. If less than 6 leave their money in the bank (or rather, more than 4 withdraw), then those who left their money in the bank (and have now lost it because the bank closed), receive a payoff of -E. Those who withdrew their money receive a payoff of 0. Solve for the pure strategy Nash equilibria of this game. Assume Q > 0 and > > 0

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