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Find a Nash equilibrium using back- ward induction for the following tree: 56 14 3 1:2 1: 07 45 2:1 20 2.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15: Contracting, Governance, And Organizational Form

Section: Chapter Questions

Problem 11E

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Question

Find a Nash equilibrium using back-
ward induction for the following tree:
56
•14
3.
1
2:2
•38
1:2
1
1:
0 7
45
1
2:1
20

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Consider the following game: 1,2 L M R U 8,4 3,4 5,2 M 8,8 2,3 6,2 D 9, k 0,1 1,1 Which statement is true? (D, L) is a Nash equilibrium for k > 0. (D, L) is Pareto efficient if k > 2. (D, L) is the only Pareto efficient outcome of the game. There are at least three Pareto efficient outcomes for k > 2. There is no mixed strategy Nash equilibrium of this game
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