Econ171_H3 - the payo/s of the signaling game. Frogs like...

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Homework Problems #3 Princess and Frog Signaling Game 1. Once upon a time a signaling game was played between a princess and a frog. The frog was the Sender and the princess the Receiver. He could either say he was a "prince" or a "frog." The princess could either kiss the frog, in which case he might turn into a prince. Or, she could eat him. It was well known that 10% of the frogs in the kingdom were actually princes who had had a spell cast upon them. Only frogs that were actually princes would turn into princes when kissed by a princess. Here are some common factts about frogs and princesses that will help you understand
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Unformatted text preview: the payo/s of the signaling game. Frogs like to kiss princesses and don&t like to be eaten. Frogs who are really princes especially like to kiss princesses (because then the frog turns into a prince). Frogs who are not really princes cannot say "prince" without rst taking costly lessons in elocution. Princesses like to eat frogs, but they prefer to kiss frogs who are really princes. Princesses don&t like to kiss frogs who are not princes. Payo/s consistent with these facts are shown below. (a) Find all pure-strategy equilibria (both separating and pooling). 1...
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