Consider the following Bayesian game. Player 1 can be of type t e {4, 6) where Pr(t = 4) = 0.6. Player 1 knows his type, but Player 2 only knows the prior distribution of 1's type. Call o4 Player 1's probability of playing A if he is type 4, 06 Player 1's probability of playing A if he is of type 6, and o, Player 2's probability of playing C. Player 2 D Page 2 t 1,0 A Player 1 1,0 0,2 B There is a BNE in which all player types play mixed strategies, and o4 = 06. In it, 04 = 06 = Oe = Make sure you round your answers to 3 decimal places if necessary.

Consider the following Bayesian game. Player 1 can be of type t e {4, 6) where Pr(t = 4) = 0.6. Player 1 knows his type, but Player 2 only knows the prior distribution of 1's type. Call o4 Player 1's probability of playing A if he is type 4, 06 Player 1's probability of playing A if he is of type 6, and o, Player 2's probability of playing C. Player 2 D Page 2 t 1,0 A Player 1 1,0 0,2 B There is a BNE in which all player types play mixed strategies, and o4 = 06. In it, 04 = 06 = Oe = Make sure you round your answers to 3 decimal places if necessary.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.3P

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