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Problem 2 . Consider a two - player game where player A chooses Up , or Down and player B chooses Left, Center,

Problem 2.
Consider a two-player game where player A chooses "Up," or "Down" and player B chooses
"Left," "Center," or "Right". Their payoffs are as follows: When player A chooses "Up" and
player B chooses "Left" player A gets $5 while player B gets $5. When player A chooses
"Up" and player B chooses "Center" they get $6 and $1 correspondingly, while when player
A chooses "Up" and player B chooses "Right" player A loses $2 while player B gets $4.
Moreover, when player A chooses "Down" and player B chooses "Left" they get $6 and $1,
while when player A chooses "Down" and player B chooses "Center" they both get $1. Finally,
when player A chooses "Down" and player B chooses "Right" player A loses $1 and player B
gets $2. Assume that the players decide simultaneously (or, in general, when one makes his
decision doesn't know what the other player has chosen).
A strategy is DOMINATED if there exists. another strategy for the player that yields higher
payoff, regardless of which strategy the other player chooses. Dominated strategies are assig-
ned a probability of 0 in any Nash Equilibrium in mixed strategies. Given this observation
answer the following parts of this problem:
(d) Find the best response functions and the mixed strategies Nash Equilibrium if each
player randomizes over his actions.
(e) Show graphically the best responses and the Nash Equilibria (in pure and in mixed
strategies).
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