Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Game Theory Expert

Walter, Karl, and Ferdinand are on the road to Dallas. They arrive at a fork in the road; should they turn right or left?

Type t1 believes that "we should turn right, everyone here believes that we should turn right, everyone here believes that everyone here believes that we should turn right, etc.": in other words, that type believes that turning right is called for, and believes that this is common belief among the three.

Type t2 believes that "we should turn right, the two others believe that we should turn left, the two others believe that everyone here believes that we should turn left, the two others believe that everyone here believes that everyone here believes that we should turn left, etc.": in other words, that type believes that turning right is called for, but believes that the other two believe that they should turn left and that this fact is common belief among the three.

Type t3 does not know which way to turn, but believes that the two others know the right way to turn, and believes that the others believe that everyone knows the right way to turn: he believes "the probability that we should turn right is 1/2, and the probability that we should turn left is 1/2; if we should turn right, then the two others believe that we should turn right, and that this is common belief among everyone here, and if we should turn left, then the two others believe that we should turn left, and that this is common belief among everyone here." Walter's type is t1, Karl's type is t2, and Ferdinand's type is t3.

(a) Construct a belief space in which the described situation is represented by a state of the world and indicate that state.

(b) What is the minimal belief subspace of each of the three players (at the state of the world in which Walter's type is t1, Karl's type is t2, and Ferdinand's type is t3)?

Game Theory, Economics

  • Category:- Game Theory
  • Reference No.:- M92086254

Have any Question?


Related Questions in Game Theory

In this assessment task you will take the role of an expert

In this assessment task you will take the role of an expert economist, employed by a government department or regulatory authority. Decision-makers in government rely on the advice of experts, like you, when formulating ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As