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Assignment3_MATH4321_12S

# Assignment3_MATH4321_12S - probability The expected amount...

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MATH 310 Game Theory Spring 2012 Assignment 3 1. Reduce the Kuhn Tree of Exercise 2 in Assignment 2 to strategic form and then find all PSEs. 2. Find the PPSE of the Votes by Veto game in Assignment 2. 3. Reduce the following Kuhn tree to strategic form. Find all PSE’s and PPSE. 4 . Reduce the following Kuhn tree to strategic form and find all PSE’s.

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Mission : An honest father tells his two sons that he has placed 10 n dollars in one envelope, and 10 n+1 dollars in the other, where n is chosen with equal probability among integers between 1 to 6. The father randomly hands each son an envelope. The first son looks inside and finds \$10,000. He calculates that the other envelope contains either \$1,000 or \$100,000 with equal
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Unformatted text preview: probability. The expected amount in the other envelope is then \$50,500. The second son finds only \$1,000 in his envelope. Again, he calculates that the expected amount of the other envelope is \$5,050. The father privately asks each son whether he would be willing to pay \$1 to switch envelopes. Both son say yes. The father then tells each son what his brother said and repeats the question. Again, both say yes. The father relays the brothers’ answers and ask each a third time. Again both say yes. But if the father relays the answer and ask a fourth time, the son with \$1,000 will say yes, but the son with \$10,000 will say no. Why?...
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