The following table contains the possible actions and payoffs of players 1 and 2.     Player 2       Cooperate Not Cooperate Player Cooperate 15 , 15 -20 , 20 1 Not Cooperate 20 , -10 10 , 10     This game is infinitely repeated, and in each period both players must choose their actions simultaneously. If both players follow a tit-for-tat strategy, then they can Cooperate in equilibrium if the interest rate r is . At an interest rate of r=0.5, . If instead of playing an infinite number of times, the players play the game only 10 times, then in the first period player 1 receives a payoff of

Return to the game between Monica and Nancy in Exercise U10 in Chapter 5. Assume that Monica and Nancy choose their effort levels sequentially instead of simultaneously. Monica commits to her choice of effort level first. On observing this decision, Nancy commits to her own effort level. What is the subgame - perfect equilibrium of the game where the joint profits are 5m + 4n+ mn, the costs of their efforts to Monica and Nancy are m2 and n2, respectively, and Monica commits to an effort level first? Compare the payoffs to Monica and Nancy with those found in Exercise U10 in Chapter 5. Does this game have a first-mover or second - mover advantage? Using the same joint profit function as in part (a), find the subgame - perfect equilibrium for the game where Nancy must commit first to an effort level. U10. Return to the game between Monica and Nancy in Exercise U10 in Chapter 5. Assume that Monica and Nancy choose their effort levels sequentially instead of simultaneously. Monica commits…

Consider the following game - one card is dealt to player 1 ( the sender) from a standard deck of playing cards. The card may either be red (heart or diamond) or black (spades or clubs). Player 1 observes her card, but player 2 (the receiver) does not - Player 1 decides to Play (P) or Not Play (N). If player 1 chooses not to play, then the game ends and the player receives -1 and player 2 receives 1. - If player 1 chooses to play, then player 2 observes this decision (but not the card) and chooses to Continue (C) or Quit (Q). If player 2 chooses Q, player 1 earns a payoff of 1 and player 2 a payoff of -1 regardless of player 1's card - If player 2 chooses continue, player 1 reveals her card. If the card is red, player 1 receives a payoff of 3 and player 2 a payoff of -3. If the card is black, player 1 receives a payoff of 2 and player 2 a payoff of -1   a. Draw the extensive form game b. Draw the Bayesian form game

None