ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Mohamed and Kate each pick an integer number between 1 and 3 (inclusive). They make their choices sequentially.Mohamed is the first player and Kate the second player. If they pick the same number each receives a payoff equal to the number they named. If they pick a different number, they get nothing. What is the SPE of the game?
a. Mohamed chooses 3 and Kate is indifferent between 1, 2 and 3.
b. Mohamed chooses 3 and Kate chooses 1 if Mohamed chooses 1, 2 if Mohamed chooses 2, and 3 if Mohamed chooses 3.
c. Mohamed chooses 1 and Kate chooses 1 if Mohamed chooses 1, 2 if Mohamed chooses 2 and 3 if Mohamed chooses 3.
d. Mohamed chooses 3 and Kate chooses 3.
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