Stephen J. Seagull must decide whether or not to start a new movie project. If he decides not to, he and Clod VandeCamp both get a utility of 10. If he decides to begin the project, both he and Clod must simultaneously decide who the director should be: George Spellbinder, or Ed Tree. If they disagree on the director, the movie isn't made, but both have wasted time, so they get only a utility of 0. If they agree on George Spellbinder, the movie will be a roaring success, and each gets a utility of 20. If they agree on Ed Tree, the movie will be terrible. and they will only get a utility of 5. (a). Draw the extensive form of this game. (b). Write down the normal form. (c). Find all Nash equilibria. (d). Apply the theory of iterated elimination of weakly dominated strategies and state its prodiction

Stephen J. Seagull must decide whether or not to start a new movie project. If he decides not to, he and Clod VandeCamp both get a utility of 10. If he decides to begin the project, both he and Clod must simultaneously decide who the director should be: George Spellbinder, or Ed Tree. If they disagree on the director, the movie isn't made, but both have wasted time, so they get only a utility of 0. If they agree on George Spellbinder, the movie will be a roaring success, and each gets a utility of 20. If they agree on Ed Tree, the movie will be terrible. and they will only get a utility of 5. (a). Draw the extensive form of this game. (b). Write down the normal form. (c). Find all Nash equilibria. (d). Apply the theory of iterated elimination of weakly dominated strategies and state its prodiction

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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