Pl and P2 play a simultaneous move game with payoffs given below. Suppose now that both players have private information. P1 knows the value of 01, but P2 does not. P2 knows the value of 02, but P1 does not. P2 A B A 01,–1 1,0 P1 В 1,0 0, 02 Suppose 01 is equal to either 0 or –1, each with probability 1/2. Suppose 02 is equal to either -1 or 1, each with probability 1/2. All of the above is common knowledge. Again, notice that even though 0; is random from Pj's perspective, Pi knows what O; is. Consider pure equilibria of the game. (By pure equilibrium, I mean that no type of any player mixes in the equilibrium, but this doesn't mean that each type of a player has to do the same thing.) How many pure equilibria does this game have? Numerical answer

Pl and P2 play a simultaneous move game with payoffs given below. Suppose now that both players have private information. P1 knows the value of 01, but P2 does not. P2 knows the value of 02, but P1 does not. P2 A B A 01,–1 1,0 P1 В 1,0 0, 02 Suppose 01 is equal to either 0 or –1, each with probability 1/2. Suppose 02 is equal to either -1 or 1, each with probability 1/2. All of the above is common knowledge. Again, notice that even though 0; is random from Pj's perspective, Pi knows what O; is. Consider pure equilibria of the game. (By pure equilibrium, I mean that no type of any player mixes in the equilibrium, but this doesn't mean that each type of a player has to do the same thing.) How many pure equilibria does this game have? Numerical answer

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.3P

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