4. Consider the following two-person normal form game (Chicken) and the (direct) correlation device, where 0 < q < 1. Now call a correlated equilibrium "disobedient" if in the extended game, the strategy of "playing the non-recommended action" for both players constitute a Nash equilibrium. For this game, assuming that (b-a) = (d-c), prove that the following device is a disobedient correlated equilibrium if q s 1/3. Game Device A А P A а, а d, b A (1- q)/2 P b, d с, с P (1-q)/2

4. Consider the following two-person normal form game (Chicken) and the (direct) correlation device, where 0 < q < 1. Now call a correlated equilibrium "disobedient" if in the extended game, the strategy of "playing the non-recommended action" for both players constitute a Nash equilibrium. For this game, assuming that (b-a) = (d-c), prove that the following device is a disobedient correlated equilibrium if q s 1/3. Game Device A А P A а, а d, b A (1- q)/2 P b, d с, с P (1-q)/2

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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