Question
Players 1 and 2 each simultaneously choose an integer from the set {1, 2, 3}. If the two players choose the same integer , then
Players 1 and 2 each simultaneously choose an integer from the set {1, 2, 3}. If the two players choose the same integer , then player 2 pays to player 1; otherwise, no payment is made. Each player seeks to maximize her expected monetary payoff. There is no pure strategy equilibrium in this game, but there is a mixed strategy equilibrium. Suppose that player 1 plays the mixed strategy (p1, p2, p3), where p is the probability that integer is chosen, and that player 2 plays the mixed strategy (q1, q2, q3). Suppose that this strategy profile is a Nash equilibrium.
a) Show that p >0 and q >0 for any {1,2,3}.
b) Find a mixed strategy Nash equilibrium of this game.
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