BET GAME Each player puts an ante of $1 into the pot. There are four kings and four queens. The professor will randomly draw a card from the dealer, privately observe what it is, and decide whether to fold or to bet.< a) If the professor folds, the game ends, and you wins the pot, gaining the professor's $1 ante.< b) If the professor bets, another dollar will be placed in the pot, after which you has the option to either fold or call.< b-1) if you fold, the game is end and you lose you $1 ante.< b-2) if you call, you need to add another $1 to the pot and the professor need to reveal the card. At this stage, there will be $4 in the pot. You win the pot with a queen and lose the pot with a king.< (1) Draw the Game Tree.< (2) Write down the Payoff Matrix. (3) Find the Bayesian Nash Equilibrium (4) Find the Perfect Bayesian Nash Equilibrium.<

BET GAME Each player puts an ante of $1 into the pot. There are four kings and four queens. The professor will randomly draw a card from the dealer, privately observe what it is, and decide whether to fold or to bet.< a) If the professor folds, the game ends, and you wins the pot, gaining the professor's $1 ante.< b) If the professor bets, another dollar will be placed in the pot, after which you has the option to either fold or call.< b-1) if you fold, the game is end and you lose you $1 ante.< b-2) if you call, you need to add another $1 to the pot and the professor need to reveal the card. At this stage, there will be $4 in the pot. You win the pot with a queen and lose the pot with a king.< (1) Draw the Game Tree.< (2) Write down the Payoff Matrix. (3) Find the Bayesian Nash Equilibrium (4) Find the Perfect Bayesian Nash Equilibrium.<

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter18: Auctions

Section: Chapter Questions

Problem 1MC

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