Question
Two movie fans Ali and Ayse have only one pre-paid ticket to one of the films in Istanbul Film Festival, which is sold out, and
Two movie fans Ali and Ayse have only one pre-paid ticket to one of the films in Istanbul
Film Festival, which is sold out, and they have to decide who gets the ticket. They both
value seeing the movie equally, and each gets a payoff u > 0 from watching the movie. To
determine who gets the ticket, they agree to play the following game: They simultaneously
pick a number from the interval [0,). Whoever picks the larger number gets the ticket.
If they pick the same number, then Ayse gets the ticket. However, picking a large number
is costly. They both incur a cost equal to the number they pick regardless of receiving the
ticket or not. Find all pure strategy Nash equilibrium profiles, if any.
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