A thug wants the contents of a safe and is threatening the owner, the only person who knows the code, to open the safe. The table shows the value that each person places on the various possible outcomes. Thug Safe's Owner Open the safe, thug does not kill 4 3 Open the safe, thug kills 2 1 Do not open, thug kills 1 2 Do not open, thug does not kill 3 4 In the rollback equilibrium, the owner and the thug does not open the safe; kill opens the safe; kill opens the safe; does not kill does not open the safe; does not kill
A thug wants the contents of a safe and is threatening the owner, the only person who knows the code, to open the safe. The table shows the value that each person places on the various possible outcomes. Thug Safe's Owner Open the safe, thug does not kill 4 3 Open the safe, thug kills 2 1 Do not open, thug kills 1 2 Do not open, thug does not kill 3 4 In the rollback equilibrium, the owner and the thug does not open the safe; kill opens the safe; kill opens the safe; does not kill does not open the safe; does not kill
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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