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Unformatted text preview: Hope this helps. Al Qaeda is considering bombing a subway station in Spain to hopefully force the Spanish to withdraw their troops in Iraq. The players are the Spanish Government and Al Qaeda. AQ is uncertain whether the Spanish Government will respond the bombings with withdrawing their troops from Iraq ( game 1 with probability p) or whether they would respond by heightening their support for the US in Iraq and against the fight on terror (game 2 with probability 1-p). . The leaders of AQ must evaluate these two games and choose which one is the true game and act according (bomb Spain if game 1 is true and not bomb Spain if game 2 is true). The threshold for p that...
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This note was uploaded on 11/19/2008 for the course ECON 101 taught by Professor Womer during the Fall '08 term at NYU.
- Fall '08