Question
Hey, I really need help with this question, would greatly appreciate it. Thank you 9. Two friends, Andrea and Bernardo, would like to share 101
Hey, I really need help with this question, would greatly appreciate it. Thank you
9. Two friends, Andrea and Bernardo, would like to share 101 Euros. They agree on the following procedure. Each friend writes (without knowing what the other writes) a number on a sheet of paper. They share the money according to the following rules: i. if both numbers are even, Andrea obtains 51 Euros and Bernardo 50; ii. if both numbers are odd, Andrea obtains 50 Euros and Bernardo 51; and iii. in the remaining cases, both obtain 50 Euros, and one Euro is lost. (a) Represent this game (Game A) in normal form, and find the pure strategy Nash equilibria. Bernardo is specially interested in the egalitarian solution, but he does not like the one that would be obtained from the previous game. He proposes to give each player more options by introducing the option \ you dont have to wrtie any number(denote this new game by Game B). In this case if one player writes a number and the other not, the player not writing a number obtains all the money and the other nothing. On the other hand, if both choose the strategy \you dont have to write any number", each player obtains 1 Euro and the rest of the money is lost. (b) Find the Nash equilibria of the new game (Game B).
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