Games of strategy 4th ed ch 8

U5.Return to the Tudor-Fordor problem from Section 6.C, when Tudor's low

per-unit cost is 10. Let z be the probability that Tudor actually has a low

per-unit cost.

(a)Rewrite the table in Figure 8.10 in terms of z.

(b)How many pure-strategy equilibria are there when z 5 0? What type

of equilibrium (separating, pooling, or semiseparating) occurs when

z 5 0? Explain.

(c)How many pure-strategy equilibria are there when z 5 1? What type

of equilibrium (separating, pooling, or semiseparating) occurs when

z 5 1? Explain.