Show that the set of trembling hand perfect equilibria

Reference no: EM13917155

Two people are engaged in the following game to select either a good outcome or a bad outcome. First each of them names either himself or the other person as the one who will make the choice. If they both name the same person then that person selects the outcome. If each of them chooses himself then chance selects each of them with equal probability to make the choice. If each of them chooses the other then the good outcome is automatically chosen. At no point in the procedure is either person informed of the person initially selected by the other person. Each person's payoff from the good outcome is 2, regardless of who chooses it; his payoff from the bad outcome is I if the other person chooses it and 0 if he himself chooses it. Show that the set of trembling hand perfect equilibria of this extensive game is disjoint from the set of behavioral strategy profiles associated with the trembling hand perfect equilibria of its strategic form; interpret the equilibria.

We conclude the chapter by noting that it follows from Proposition 249.1 that every finite extensive game with perfect recall has a trembling hand perfect equilibrium and hence, by Proposition 251.2, a sequential equilibrium.

Reference no: EM13917155

Questions Cloud

Perform the arithmetic operations : Convert the following numbers into binary and perform the arithmetic operations in (i) and (ii) using signed binary numbers with 2's complement. Use 7 bits to represent the integer part of decimal numbers and the sign bit. Use three bits to repres..

Create a histogram and polygon using the commuting data : Select a column of data other than Commuting Time from the STATES data file and create a Histogram and Polygon using the Commuting data as an example. 150 points (50 extra) will be assigned for completing this task

Involve buying goods from other companies : involve buying goods from other companies rather than making them internally.

The management of oak creek stadium : After receiving 21 different setups, the management of Oak Creek Stadium has decided on the attached ER diagram and instance tables for the development of a database to keep track of its operations.

Show that the set of trembling hand perfect equilibria : Show that the set of trembling hand perfect equilibria of this extensive game is disjoint from the set of behavioral strategy profiles associated with the trembling hand perfect equilibria of its strategic form.

A perpetual inventory system : Hogan’s Department Store uses a perpetual inventory system. Data for product E2-D2 include the purchases shown below. Date Number of Units Unit Price May 7 60 $11 July 28 32 17 On June 1, Hogan sold 30 units, and on August 27, 32 more units.

Runners corporation sold land : Runners Corporation sold land for $4500 cash with no gains or loss. Make a journal entry reflecting this statement.

Capital asset pricing model : The Capital Asset Pricing Model (CAPM) is one of the primary financial measures used by banks to determine how assets are performing. The CAPM is used to determine the expected security return which equals the risk free rate of return plus Beta ti..

Units of inventory : During 2015, a company sells 460 units of inventory for $91 each. The company has the following inventory purchase transactions for 2015:

User Account

All Pages