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nature and . Each of the states is associated with a payoff matrix as follows: There is a common prior belief that the state is

nature and . Each of the states is associated with a payoff matrix as
follows:
There is a common prior belief that the state is more likely with a
probability of 35. Before they play the game Alp gets to learn the true state of
nature but cannot directly share this information with Burcu. Instead, they
communicate only by electronic mail signals. Due to "technical difficulties"
there is a 0.01 probability that the message does not arrive at its destination.
At the risk of creating discord, the electronic mail network is set up to send a
confirmation automatically if any message is received, including not only the
confirmation of the initial message but a confirmation of the confirmation,
and so on, yet, it is also commonly known that Alp's computer can
send at most 8 messages, including the confirmations. If a message
does not arrive, then the communication stops. A message is sent from Alp's
computer only if the state of the nature is , i.e., no message is sent if the
state of nature is . At the end of the communication phase their computer
screen displays to each player the number of messages his/her computer has
sent. Each player chooses an action after observing the number on their
computer screen.
a. Clearly model this game as a Bayesian Game.
b. Can Alp and Burcu coordinate on playing (A,A) in state of the world
and (B,B) in state of the world in a Bayesian Nash Equilibrium?
Why / Why not?
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