Two hunters are on a stag hunt. They split up in the forest and each have two strategies: hunt for a stag (S), or give up the stag hunt and instead hunt for rabbit (R). If they both hunt for a stag, they will succeed and each earn a payoff of 9. If one hunts for stag and the other gives up and hunts for rabbit, the stag hunter receives 0 and the rabbit hunter 8. If both hunt for rabbit then each receives 7. Compute all Nash equilibria for this game, called 'The Stag Hunt', depicted below. Which of these equilibria do you think is most likely to be played? Why? S R S 9,9 8,0 R 0,8 7,7

Two hunters are on a stag hunt. They split up in the forest and each have two strategies: hunt for a stag (S), or give up the stag hunt and instead hunt for rabbit (R). If they both hunt for a stag, they will succeed and each earn a payoff of 9. If one hunts for stag and the other gives up and hunts for rabbit, the stag hunter receives 0 and the rabbit hunter 8. If both hunt for rabbit then each receives 7. Compute all Nash equilibria for this game, called 'The Stag Hunt', depicted below. Which of these equilibria do you think is most likely to be played? Why? S R S 9,9 8,0 R 0,8 7,7

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 15.1IP

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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.
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