3. Consider a game in which three players each has to write 20 million TL or 100 million TL on a piece of paper without observing what the others have written. If at least one player has written 20, then each player receives the amount she wrote. If, however, all players have written 100, nobody gets any money. Assume that each player only cares about the amount of money that she gets without concern for the others. (a) Construct a game table for this interaction. (b) For each player, check if there is strict or weak domination between her two strategies. (c) For each player, write down her strictly dominated and weakly dominated strate- gies. (d) For each player, write down her strictly dominant and weakly dominant strategies. (e) Find all dominant strategy equilibria. (f) Find all Nash equilibria.
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In this case, each player has two strategies: writing 20 million TL or writing 100 million TL. So, there are 2^3 = 8 possible combinations. Let's denote the strategies as follows: Player 1: A1 (write 20 million TL), B1 (write 100 million TL) Player 2: A2 (write Show more…
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