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PBE means perfect bayesian equilibrium Consider the following sender-receiver game: The sender observes 0 E {0, 0} and then chooses L or R. The receiver

PBE means perfect bayesian equilibrium

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Consider the following sender-receiver game: The sender observes 0 E {0, 0} and then chooses L or R. The receiver observes the sender's move (but not 0), and then chooses U or D. Each type is equally likely and the payoffs are as follows: (5, 1)- U L R U .(4, 1 ) (1,4). D 0.5 . . . . D .(6, 3) Nature (5,2)- U 0.5 . . . . . . . U .(4, 1 ) (2, 1). D L R D .(3, 2) (a) Find all pure-strategy PBE. (b) Are there any additional pure strategy weak PBE (in addition to the PBE you charac- terized above)? (c) Extra credit. Show that each of the PBE identified in (a) is a sequential equilibrium. Note: Don't say "the result follows because PBE and sequential equilibria are equiv- alent." Prove that a pair of a strategy profile and a belief satisfies the consistency condition

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