Homework answers / question archive / Consider the situation described in Figure 1 below

Consider the situation described in Figure 1 below

Economics

Share With

Consider the situation described in Figure 1 below. R |? 1,3 L R 1 R' 2,1 0,0 0,2 0,1 1. Represent the strategic form of the game.[1 point] 2. Determine all Nash equilibria in pure strategies of the game.[1 point] 3. Determine the subgame-perfect equilibria in pure strategies of the game.[1 point] 4. Is it plausible or credible to have the situation (RR) as an equilibrium in this game? Explain. [1 point] 5. Assume that player 2 believes that history L occurred with probability p, and history M occurred with probability 1-p. a. Given player 2's belief, calculate player 2's expected payoff from playing R' and player 2's expected payoff from playing 2': [1 point] b. Given the belief, what action should player 2 choose between R' and L? Explain. [1 point] C. Requiring that each player has a belief and acts optimally given this belief, would any change occur in the subgame-perfect equilibria found in question 3.7 [1 point]