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Kindly help me solve this question (4) Consider Bank Run problem from Class. There are 10 savers. Each chooses whether to withdraw their money from
Kindly help me solve this question
(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 Q. For those who withdrew their money, they receive a payoff of 0. 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 2. Those who withdrew their money receive a payoff of 0. Solve for the pure strategy Nash equilibria of this game. Assume Q 2 0 and E ::~ 0. BONUS QUESTION: Is there a mixed strategy Nash equilibrium of this game? (Do not get discouraged if you cannot gure this out, but give it a shot!)Step by Step Solution
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