Q a selfless person approaches jones and smith with a 100, Ask an Expert

Economics

Q. A selfless person approaches Jones and smith with a $100 bill and offers to sell it to the highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $2 and smith bids $1 they pay a total of $3, but Jones gets the money leaving him with a net gain of $98 and smith with $1. If both bid the same amount, the $100 split evenly between them. Assume that each of them has only $1 bills on hand leaving three possible bids" $0, $1 or $2. Write out the payoff matrix for this game, and then find its Nash equilibrium.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9724452

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