Midterm Examination Solutions ECON 504 - Microeconomics II
نویسنده
چکیده
Solution The following is a Nash equilibrium: Player 1 calls and the other players do not call. Player 1’s payoff in this action profile is equal to v− c, and is greater than 0, which is the payoff he would get if he deviated and did not call. All the other players get a payoff of v, which is greater than the payoff that they would get if they were to deviate and call: v − c. Therefore, no player has a profitable unilateral deviation and hence this is a Nash equilibrium. (b) Find the symmetric mixed strategy Nash equilibrium in which each player calls with probability p ∈ (0, 1).
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Midterm Examination I: Solutions ECON 504 - Microeconomics II
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