Posted: November 13th, 2015
Gamethoery
Contestants I and II in a game show start the last round with winnings of $400and
$500 dollars respectively. Each must decide to pass or gamble, not knowing the
choiceof the other. A player who passes keeps the money he/she started with. If
Player I
gambles, he wins $200 with probability 1/2 or loses his entire $400 with
probability 1/2.
If Player II gambles, she wins or loses $200 with probability 1/2 each. These
outcomesare independent. Then the contestant with the higher amount at the end wins
a bonus of$400.
(a) Draw the Kuhn tree.
(b) Put into strategic form.
(c) Find the safety levels
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