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Two or three players are about to play a game: with probability 1/2 the game involves Players 1 and 2 and with probability 1/2 the game involves Players 1, 2, and 3. Players 2 and 3 know which game is being played. In contrast, Player 1, who participates in the game under all conditions, does not know whether he is playing against Player 2 alone, or against both Players 2 and 3. If the game involves Players 1 and 2 the game is given by the following matrix, where Player 1 chooses the row, and Player 2 chooses the column:

2054_Matrix 07.jpg

with Player 3 receiving no payoff. If the game involves all three players, the game is given by the following two matrices, where Player 1 chooses the row, Player 2 chooses the column, and Player 3 chooses the matrix:

2087_Matrix 08.jpg

(a) What are the states of nature in this game?

(b) How many pure strategies does each player have in this game?

(c) Depict this game as a game with incomplete information.

(d) Describe the game in extensive form.

(e) Find two Bayesian equilibria in pure strategies.

(f) Find an additional Bayesian equilibrium by identifying a strategy vector in which all the players of all types are indifferent between their two possible actions.

Game Theory, Economics

  • Category:- Game Theory
  • Reference No.:- M92086237

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