7 Applying The Intuitive Criterion In The Far West Beer Quiche Game Consider The Following Sequential Game With In 1 (187.46 KiB) Viewed 99 times
7 Applying The Intuitive Criterion In The Far West Beer Quiche Game Consider The Following Sequential Game With In 2 (102.35 KiB) Viewed 99 times
7. Applying the Intuitive Criterion in the Far West (“Beer-Quiche game”). Consider the following sequential game with incomplete information. It represents a Saloon in the Far West. Player 1 just moved into town, and nobody else but him knows whether he is “Wimpy” or “Surely” (i.e., Weak or Strong). At that moment in the morning the Saloon is a quite place, and he is deciding whether to have Quiche or Beer for breakfast. Then, player 2 (the typical character looking for trouble in this kind of films) enters into the Saloon and observes the newcomer having breakfast, but does not know whether he is Surely or Wimpy. (a) Check if the pooling equilibrium in which both types of player 1 have Beer for breakfast survives the Cho and Kreps' (1987) Intuitive Criterion. (1, 1) Duel Duel (0,1) y Quiche Player 1 Beer u (3,0) Wimpy 0.1 (2,0) Not Duel Not Duel Player 2 Nature Player 2 Duel (0, -1) Duel Surely 0.9 (1,-1) 1-y Quiche Beer Player 1-4 (2,0) Not Duel Not Duel (3,0)
(b) Check if pooling equilibrium in which both types of player 1 have Quiche for breakfast survives the Cho and Kreps' (1987) Intuitive Criterion. (1, 1) Duel Duel (0,1) 7 Quiche Player 1 Beer u 1 (3,0) Wimpy 0.1 (2,0) Not Duel Not Duel Player 2 Nature Player 2 | Duel (0,-1) Duel Surely 0.9 (1,-1) 1-Y Quiche Beer Player 1-4 (2,0) Not Duel Not Duel (3,0)
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