2) Suppose the following game of "Matching Pennies." In this game, each player chooses heads or tails and the two players reveal their coins at the same time. If the coins match (i.e., both are heads or both are tails), Player A wins and receives a dollar from Player B. If the coins do not match, Player B wins and receives a dollar from Player A. The payoff matrix is shown in the next table Player A Heads Tails Player B Heads 1,-1 -1,1 Tails -1,1 1,-1 Check that there is no Nash Equilibrium in pure strategies. Explain the Nash Equilibrium in mixed strategies for this game.

2) Suppose the following game of "Matching Pennies." In this game, each player chooses heads or tails and the two players reveal their coins at the same time. If the coins match (i.e., both are heads or both are tails), Player A wins and receives a dollar from Player B. If the coins do not match, Player B wins and receives a dollar from Player A. The payoff matrix is shown in the next table Player A Heads Tails Player B Heads 1,-1 -1,1 Tails -1,1 1,-1 Check that there is no Nash Equilibrium in pure strategies. Explain the Nash Equilibrium in mixed strategies for this game.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 17P

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