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In a gambling game, Player A and Player B both have a $1 and a $5 bill. Each player selects one of the bills without the other player knowing the bill selected. Simultaneously they both reveal the bills selected. If the bills do not match, Player A wins Player B's bill. If the bills match, Player B wins player A's bill.

a. Develop the game theory table for this game. The values should be expressed as the gains (or losses) for Player A.

b. Is there a pure strategy? Why or why not?

c. Determine the optimal strategies and the value of this game. Does the game favor one player over the other?

d. Suppose Player B decides to deviate from the optimal strategy and begins playing each bill 50% of the time. What should Player A do to improve Player A's winnings?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91951014

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