4. Player 1 and Player 2 have to decide how to split $3. They must each choose $0, $1, $2, or $3. If the total (player 1
Posted: Wed Apr 27, 2022 12:13 pm
4. Player 1 and Player 2 have to decide how to split $3. They
must each choose $0, $1, $2, or $3. If the total (player 1 choice +
player 2 choice) is $3 or less, they each get what they chose. If
the total is more than $3, they get nothing. a) Suppose that player
chooses first and player 2 chooses second. Show this using a
correctly labeled game tree. What is the likely outcome, and why?
b) Suppose that the two players choose at the same time. Show this
game using a game matrix. What are the maxi-min strategies and
likely outcome for this game? c) If the two players played this
simultaneous game multiple times, what kind of agreement would they
likely reach, and how will they enforce it? Hint: discuss the idea
of credible threats.
must each choose $0, $1, $2, or $3. If the total (player 1 choice +
player 2 choice) is $3 or less, they each get what they chose. If
the total is more than $3, they get nothing. a) Suppose that player
chooses first and player 2 chooses second. Show this using a
correctly labeled game tree. What is the likely outcome, and why?
b) Suppose that the two players choose at the same time. Show this
game using a game matrix. What are the maxi-min strategies and
likely outcome for this game? c) If the two players played this
simultaneous game multiple times, what kind of agreement would they
likely reach, and how will they enforce it? Hint: discuss the idea
of credible threats.