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Question 4 . Zeynep and Mehmet will eventually play the following game. table [ [ , , Mehmet ] , [ Zeynep , ,
Question Zeynep and Mehmet will eventually play the following game.
tableMehmetZeynep
In a preliminary stage, Zeynep has already asked Mehmet to allow her to move first and proposed to pay him unit of her own payoff in exchange. So Mehmet has to options:
If he accepts Zeynep's offer: they will play the sequential move version of the above game in which Zeynep moves first. Mehmet will receive unit of utility more, and Zeynep will receive unit of utility less in any outcome of the game compared to the payoffs given in the bimatrix.
If he rejects Zeynep's offer: they will play the simultaneous move game.
a Represent this strategic interaction in a game tree.
b How many information sets does each player have?
c Characterize the set of pure strategies for both players.
d Present this game as a normalform game, and characterize the set of pure strategy Nash equilibria.
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