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Unformatted text preview: p is such that the worker accepts. This requires 2 p-(1-p ) 0, which simpliFes to p 1 / 3. The equilibrium is given by ( O H O L ,A ), with belief q = p . (c) Yes, there is such an equilibrium, regardless of p . It is given by ( N H N L ,R ), with belief q 1 / 3. 29.4 Clearly, the PBE strategy proFle is a BNE. In fact there is no other BNE, because the presence of the C type in this game (and the rationality of this type) implies that Player 2s information set is reached with positive probability. This relation does not hold in general, of course, because of the possibility of unreached information sets. 1...
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This note was uploaded on 12/26/2011 for the course ECON 171 taught by Professor Charness,g during the Fall '08 term at UCSB.
- Fall '08