Alice chooses action a or action b, and her choice is observed by Bob. If Alice chooses action a, then Alice receives a payoff of 5 and Bob receives a payoff of 7. If Alice chooses action b, then Bob chooses action cor action d. If Bob chooses action c, then Alice receives a payoff of 10 and Bob receives a payoff of 5. If Bob chooses action d, then Alice receives a payoff of 0 and Bob receives a payoff of 3. Which of the following are correct statements about the game described in the previous paragraph? (Mark all that are correct.) O This game has imperfect information. O Alice's backward induction payoff is 5. O This is a promise game. O Alice's backward induction payoff is 0. O This is a prisoners' dilemma. O Bob's backward induction payoff is 5. O Bob's backward induction payoff is 3. O This is a threat game.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Alice chooses action a or action b, and her choice is observed by Bob. If Alice chooses action a, then Alice receives a payoff of 5 and Bob receives
a payoff of 7. If Alice chooses action b, then Bob chooses action cor action d. If Bob chooses action c, then Alice receives a payoff of 10 and Bob
receives a payoff of 5. If Bob chooses action d, then Alice receives a payoff of 0 and Bob receives a payoff of 3.
Which of the following are correct statements about the game described in the previous paragraph? (Mark all that are correct.)
O This game has imperfect information.
O Alice's backward induction payoff is 5.
O This is a promise game.
O Alice's backward induction payoff is 0.
O This is a prisoners' dilemma.
O Bob's backward induction payoff is 5.
O Bob's backward induction payoff is 3.
O This is a threat game.
Transcribed Image Text:Alice chooses action a or action b, and her choice is observed by Bob. If Alice chooses action a, then Alice receives a payoff of 5 and Bob receives a payoff of 7. If Alice chooses action b, then Bob chooses action cor action d. If Bob chooses action c, then Alice receives a payoff of 10 and Bob receives a payoff of 5. If Bob chooses action d, then Alice receives a payoff of 0 and Bob receives a payoff of 3. Which of the following are correct statements about the game described in the previous paragraph? (Mark all that are correct.) O This game has imperfect information. O Alice's backward induction payoff is 5. O This is a promise game. O Alice's backward induction payoff is 0. O This is a prisoners' dilemma. O Bob's backward induction payoff is 5. O Bob's backward induction payoff is 3. O This is a threat game.
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