Question
You have just graduated and are planning to move away from California at the end of next month, and your landlord knows it. Your landlord
You have just graduated and are planning to move away from California at the end of next month, and your landlord knows it. Your landlord is deciding whether or not to raise your rent for your last month. After you see whether your landlord has decided to raise your rent or not, you can choose to stay in your apartment, or move to another apartment for one month before you leave California (which is expensive!). If your landlord raises your rent and you stay in your apartment, your landlord gets 100 utility and you get 50. If your landlord doesn't raise your rent and you stay, your landlord gets 75 utility and you get 100. If you decide to leave, your landlord gets 0 utility and you get 25, whether or not the landlord raised the rent.
Using backward induction, find the Nash Equilibrium in the Landlord game from the previous question. O Landlord raises rent, you leave Landlord raises rent, you stay O Landlord doesn't raise rent, you stay O Landlord doesn't raise rent, you leave O There aren't any Nash equilibria O There's more than one Nash equilibriumStep by Step Solution
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