Question
Ryan and Nicholas are chosen to play a game called Guess 2 3 the average. Each of them chooses a real number on the interval
Ryan and Nicholas are chosen to play a game called "Guess 2 3 the average. Each of them chooses a real number on the interval [0, 100]. Denote Ryan's choice as r and Nicholas' choice as n. Whoever chooses the number closest to 2 3 the average of both of the guesses (the average is r+n 2 ) wins $100. 1. Write out Ryan's best response function to Nick's strategies. Write out Nick's best response function to Ryan's strategies. 2. What is the Nash equilibrium of this game? 3. Does this seem like a reasonable prediction for what would happen in this game? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started