110_11s_SelectedQ_Ch15

# 110_11s_SelectedQ_Ch15 - Econ 110 Selected Questions From...

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2 c. What is the equilibrium of this game? The equilibrium is that each player lies and gets \$50. If B answers honestly, the best strategy for A is to lie because he would get \$500 rather than \$100. If B lies, the best strategy for A is to lie because he would get \$50 rather than \$0. So A ’s best strategy is to lie, no matter what B does. Repeat the exercise for B . B ’s best strategy is to lie, no matter what A does. d. Compare this game to the prisoners’ dilemma. Are the two games similar or different? Explain. The game is the same as a prisoners’ dilemma. In this game, as in the prisoners’ dilemma game,
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110_11s_SelectedQ_Ch15 - Econ 110 Selected Questions From...

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