Question
Please help me in answering and understanding these questions. Thank you! Joanna has a credit card account with Card Bank. Card Bank's available strategies are
Please help me in answering and understanding these questions. Thank you!
Joanna has a credit card account with Card Bank. Card Bank's available strategies are raise Joanna's credit card interest rate or do nothing. Joanna's available strategies are transfer her Card Bank account balance to another creditor or do nothing. If Card Bank raises Joanna's interest rate and Joanna does nothing, Card Bank increases profits by $1,000 while Joanna receives -$1,000. If Card Bank raises Joanna's interest rate and Joanna transfers her account to another creditor, Card Bank receives -$300 while Joanna receives -$100. If Card Bank does nothing and Joanna does nothing, each player receives $0. If Card Bank does nothing and Joanna transfers her account to another creditor, Card Bank receives -$300 while Joanna receives -$150. Draw the extensive form game tree for this sequential game. What are the sub-game perfect pure strategy Nash equilibria?
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