Question 6 (12 marks)
a) For the game described below, first write the game in strategic form and final all Nash equilibria.
Then among those equilibria, identify an equilibrium that involves non-credible threat (or promise).
State clearly which player makes what kind of threat.
Moriarty
(6,12)
Sherlock
Π
T
Sherlock
n
☐
r
(20, 5)
U
B
Moriarty
S
(10, 10) Sherlock
1
D
(5,10)
b) Consider the following game. Let p be the probability that Player 1 chooses "Up" and q be the
probability that Player 2 chooses "Left". Derive the best-response functions of the players, plot them
on the p and q coordinate plane and show all Nash equilibria.
Player 2
Left
Right
Up
3,3
3,6
Player 1
Down
2,4
6, 2
