Assume that two players play the Tinder game. There are two types of potential boyfriends: the gentleman (25% of the population) and the douchebag (75% of the population), and they can decide on the different level of effort: low, medium, and high. For the first type, the respective costs are 30, 50, and 80. For the second type, the respective costs are 50, 75, and 120. For the potential boyfriend, the payoff from being in relationship is 130, and the payoff associated with being dumped is 70. The girl can get 60 if she stays single, 100 if she is in relationship with the gentleman, and 25 if she dates the douchebag (credits to Owen Sims) a) Present the game in the extensive form b) Calculate the expected pay-off for the girl. Should she date at all? c) Discuss whether the game has a separating equilibrium
please discuss the separation eqilibrium in details
1. Assume that two players play the Tinder game. There are two types of potential boyfriends: the gentleman (25% of the population) and the douchebag (75% of the population), and they can decide on the different level of effort: low, medium, and high. For the first type, the respective costs are 30, 50, and 80. For the second type, the respective costs are 50, 75, and 120. For the potential boyfriend, the payoff from being in relationship is 130, and the payoff associated with being dumped is 70. The girl can get 60 if she stays single, 100 if she is in relationship with the gentleman, and 25 if she dates the douchebag (credits to Owen Sims)
a) Present the game in the extensive form
b) Calculate the expected pay-off for the girl. Should she date at all?
c) Discuss whether the game has a separating equilibrium
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