E3 Bayesian Game]. Consider a Bayesian game described by a following payoff matrix. Please solve (show your solution).1. Enumerate all pure strategies for each player.2. Suppose that player 1 observes his type ?1 = 3. How does player 1 think of the probability of ?2?3. Find a (pure strategy) Bayesian Nash equilibrium. Consider a Bayesian game described by a following payoff matrix.1 / 2ABAB44, 0₂2, 2iFor each i E {1,2}, 0; takes either 0 or 3 (0 € {0,3}). Values of 0; (i = 1,2) is privateinformation of player i. State of the world (0₁,0₂) is distributed by a followingprobability distribution.0₁ + 0₂,0₁ / 0₂1030₁+0₂01/21/1001231/103/10

To find the Pure strategies for each player, we need to list all possible actions they can take,…

Please solve (show your solution). 1. Enumerate all pure strategies for each player. 2. Suppose that player 1 observes his type ?1 = 3. How does player 1 think of the probability of ?2? 3. Find a (pure strategy) Bayesian Nash equilibrium.

Please solve (show your solution). 1. Enumerate all pure strategies for each player. 2. Suppose that player 1 observes his type ?1 = 3. How does player 1 think of the probability of ?2? 3. Find a (pure strategy) Bayesian Nash equilibrium.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 1.1CE

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Question

Bayesian Game]. Consider a Bayesian game described by a following payoff matrix.

Please solve (show your solution).

1. Enumerate all pure strategies for each player.

2. Suppose that player 1 observes his type ?1 = 3. How does player 1 think of the probability of ?2?

3. Find a (pure strategy) Bayesian Nash equilibrium.

Consider a Bayesian game described by a following payoff matrix.
1 / 2
A
B
A
B
4
4, 0₂
2, 2
i
For each i E {1,2}, 0; takes either 0 or 3 (0 € {0,3}). Values of 0; (i = 1,2) is private
information of player i. State of the world (0₁,0₂) is distributed by a following
probability distribution.
0₁ + 0₂,
0₁ / 0₂
1
0
3
0₁+0₂
0
1/2
1/10
012
3
1/10
3/10

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Step 2: Answer to 2. Determine how the player 1 think of probability of 2, if he observes his type 1=3

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