Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Question screenshot below There are two countries that are battling in two locations: location A and location B. Suppose that each country has 2 divisions

Question screenshot below

image text in transcribed
There are two countries that are battling in two locations: location A and location B. Suppose that each country has 2 divisions in its army. Divisions cannot be subdivided, so a country must choose either to put both divisions at Location A, both at Location B, or to put one division at location A and one at location B. If a country has more divisions at one location, then they win that location. If the countries have the same number of divisions at a location, then each country wins that location with a probability of 1/2. A country wins if it wins both locations and then it gets a payoff of 1 and the other country gets a payoff of -1. If the countries split which locations they win, then the war is a stalemate and they each get a payoff of O. a. Find all the pure and mixed strategy equilibria of this game (hint: writing out the payoff matrix for the normal form will make this fairly easy). b. Now suppose that both countries have three divisions (so they can put three divisions at one location or two at one location and one at the other location). Find all the pure and mixed equilibria of the game. c. Consider a variation of the game where one country has three divisions and the other has only two divisions. Draw the normal form payoff matrix for the game and enter the expected payoffs. d. Find all of the pure and mixed strategy equilibria for the game in c)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp

8th Edition

9780538466790

Students also viewed these Economics questions