Consider the following game: Player 1 chooses A, B, or C. If player 1 chooses A, the game ends and each player gets a payoff of $7. If player 1 chooses B, then player 2 observes their choice and plays X or Y. If player 1 chooses B and player 2 chooses X, the game ends. Player 1 gets a payoff of $14 and player 2 gets a payoff of $16. If player 1 chooses B and player 2 chooses Y, the game ends. Player 1 gets a payoff of $17 and player 2 gets a payoff of $14. If player 1 chooses Č, then player 2 chooses secretly to put either a $5 bill or a $20 bill into a sealed envelope. Player 1 does not observe his choice; rather she has two options: Open the envelope and gets whatever bill is inside. If she chooses this, player 2 gets nothing. Give the envelope back to player 2, and get $12 for sure. If she chooses this, player 2 gets the amount in the envelope. Draw the game tree for this game How many strategies does Player 1 have in this game?

Consider the following game: Player 1 chooses A, B, or C. If player 1 chooses A, the game ends and each player gets a payoff of $7. If player 1 chooses B, then player 2 observes their choice and plays X or Y. If player 1 chooses B and player 2 chooses X, the game ends. Player 1 gets a payoff of $14 and player 2 gets a payoff of $16. If player 1 chooses B and player 2 chooses Y, the game ends. Player 1 gets a payoff of $17 and player 2 gets a payoff of $14. If player 1 chooses Č, then player 2 chooses secretly to put either a $5 bill or a $20 bill into a sealed envelope. Player 1 does not observe his choice; rather she has two options: Open the envelope and gets whatever bill is inside. If she chooses this, player 2 gets nothing. Give the envelope back to player 2, and get $12 for sure. If she chooses this, player 2 gets the amount in the envelope. Draw the game tree for this game How many strategies does Player 1 have in this game?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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