What is a mixed strategy? Describe a mixed strategy that would be a Nash equilibrium for the Copycat Game, and indicate why neither player would want to deviate from that mixed strategy.
What will be an ideal response?
A player uses a mixed strategy when he randomly chooses the strategy to play, with each strategy having some fixed probability of being selected. A Nash equilibrium for the Copycat Game would occur when each player chooses his strategy by flipping a fair coin. In this case, each player would have a 50-50 chance of winning the game. If either player instead used an unfair coin to select his strategy, his opponent could use a pure strategy to win the game more than half the time.
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The figure shows the demand curve for popsicles. The price elasticity of demand when the price of a popsicle increases from $0.30 to $0.50 is ________
A) 0 B) 1 C) 1/2 D) 2
When we consider solving a free rider problem through changing social norms, it is helpful to remember:
A. all costs aren't financial. B. social disapproval can be considered a cost. C. conflict with those in your community can be considered a cost. D. All of these statements are true.
The principal-agent problem:
A. is caused by the principal having imperfect information about the agent. B. is caused by the principal being unable to perfectly observe the actions of the agent. C. arises from an imbalance of information. D. All of these statements are true.
Which of the following is a nominal quantity?
A. The number of people unemployed B. The amount of coal mined in one month C. The current price of a barrel of oil D. The number of cars produced in 2017