Question
Let's consider the following two player game The parameter Q is an element of {1, 1} for this game matrix is known only to player
Let's consider the following two player game
The parameter Q is an element of {−1, 1} for this game matrix is known only to player
2. 1st player He believes that the probability of Q = −1 and Q = 1 is equal and 1/2. Everything above is common knowledge.
(a) Formally describe this game as a Bayesian game.
(b) Find the Bayesian Nash equilibrium.
(c) What would be all the Nash equilibria of this game if Q=−1 or Q=1 were common knowledge?
X 1 Y Y Z L 3,0 2,20 2,20 0,0 2 R 0,0 2,0 3,-0
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Microeconomics An Intuitive Approach with Calculus
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