Player 1 has four shingles OA, ce, IA and IB Player 2 hastwo strat genland O Sup
ID: 1155678 • Letter: P
Question
Player 1 has four shingles OA, ce, IA and IB Player 2 hastwo strat genland O Suppose that player 1 believes that player 2 will play I with probability q and O with probabliy 1q Consider the tollowing graphs Which graph coredty depicts the expected payoltls of player t as a function of q for each of his possibile strategles? Cick on the comect graph Hint: Revine Part It of the lechure slides for an example 3.8 EOA(Q) EOB(a) EOB() -EIA(a) EIB() 20 EIB(q) 1.8 Click Sme ?ndSobmit to save and submit. Click Save All Ansger to save alnuvrs. Save All Anowers Close WindowExplanation / Answer
We need to find expected value of each strategy of player 1
For an instance expected value
2q+(1-q)2=4q+(1-q)
1-q=2q
q=1/3
E(OA)=2/3(2)+1/3(2)=2
E(OB)=2
E(IA)=1/3(4)+2/3(1)=2
E(IB)=1/3(3)+2/3(1)=5/3
E(OB) remains constant on payoff graph at level 2 and only graph 2 depicts this hence graph 2 is an answer