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PROBLEM SET 3- Answer key Question 1 UI. Best-response analysis shows that no pure-strategy Nash equilibrium exists. (b) -p - 9(1 - p) = -5p

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PROBLEM SET 3- Answer key Question 1 UI. Best-response analysis shows that no pure-strategy Nash equilibrium exists. (b) -p - 9(1 - p) = -5p + 3(1 - p) p = 3/4 q + 3(1 - q) = 9q - 3(1 - q) q =1/2 The mixed-strategy Nash equilibrium is Offense plays 3/4(Run) + 1/4(Pass) Defense plays 1/2(Anticipate Run) + 1/2(Anticipate Pass) (c) The offense uses a different mixture than the defense because its opponent has different payoffs. It thus requires a different mixture to keep its opponent indifferent. (d) Offense's expected payoff is 1(1/2) + 5(1 - 1/2) = 3

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