Question
Two male iguanas, one red, the other one blue, fightght over territory. Each iguana chooses a time at which it intends to give up the
Two male iguanas, one red, the other one blue, fightght over territory. Each iguana chooses a time at which it intends to give up the fight. If one iguana concedes, the other obtains the entire territory. If both give up exactly at the same time then they divide the territory equally. The red iguana values the territory at v1> 0, and the blue one at v2 > 0, where v1 > v2. Fighting is costly: each iguana loses one unit of payoff for each time period spent fighting, and thus both prefer as short a fight as possible. Assume that each iguana decides in advance how long to fight, and thus the game can be formulated as a simultaneous-move game. Denote the time to fight is x1 for the red iguana and x2 for the blue iguana. Write down this game in strategic form and identify all its pure strategy Nash equilibria.
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