Exercise 8.1 Consider the following Penalty game. It gives the probability of scoring a goal when the row player (the striker) adopts one of the strategies $L$ (shoot left), $R$ (shoot right), and the column player (the goalkeeper) uses the strategies $l$ (jump left), $w$ (wait then jump), $r$ (jump right). The row player is interested in maximizing and the column player in minimizing the probability of scoring a goal.
min
$l$
Max
$w$
$r$
$L$
0.6
0.7
1.0
$R$
1.0
0.8
0.7
(a) Find all equilibria of this game in mixed (including pure) strategies, and their equilibrium payoffs. Why is the payoff unique?
(b) Now suppose that player I has an additional strategy $M$ (shoot down the middle), so that the payoff matrix is
min
$l$
Max
$w$
$r$
$L$
0.6
0.7
1.0
$R$
1.0
0.8
0.7
$M$
1.0
0.0
1.0
Find an equilibrium of this game, and the equilibrium payoff. [Hint: The result from (a) will be useful.]