A selfless person approaches Jones and Smith with a $100 bill and offers to sell it to the highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $2 and Smith bids $1 they pay a total of $3, but Jones gets the money, leaving him with a net gain of $98 and Smith win -$1. If both bid the same amount, the $100 is split evenly between them. Assume that each of them has only two $1 bills on hand, leaving three possible bids: $0, $1, or $2. Write out the payoff matrix for this game, and then find its Nash equilibrium.
ECONOMICS _ A+ answer
body preview (141 words)
x xxxxxxxx xxxxxx xxxxxxxxxx xxxxx and Smith xxxx x xxxx bill and xxxxxx xx sell it to the xxxxxxx bidder, but xxxx the winning xxx losing xxxxxxx must xxx her their bids. xx if Jones xxxx $2 and xxxxx bids xx they pay a total xx xxx xxx xxxxx xxxx xxx xxxxxx leaving him xxxx a xxx xxxx of xxx xxx xxxxx win xxxx xx both bid xxx xxxx xxxxxxx the $100 is split xxxxxx between xxxxx xxxxxx xxxx each of xxxx has only xxx $1 bills xx xxxxx xxxxxxx three possible xxxxx $0, xxx or $2. Write out the payoff matrix for this xxxxx and then xxxx xxx Nash xxxxxxxxxxxx
xxxxxx xxxxxx of the xxxx
Nash xxxxxxxxxxx xx the player’s most xxxxxxxx best strategy based on its rival’s xxxx xxxxxxxxx action. xx the xxxxx case xxx Nash equilibrium xxxx be xxxx xxx or both the players will bit xxx
file1.docx preview (143 words)
x selfless xxxxxx approaches xxxxx and Smith xxxx x $100 bill and xxxxxx to xxxx it to the xxxxxxx bidder, but xxxx the xxxxxxx and xxxxxx xxxxxxx xxxx xxx xxx their xxxxx So if Jones xxxx $2 and xxxxx xxxx xx they pay x total xx $3, xxx xxxxx xxxx the xxxxxx xxxxxxx him xxxx a xxx xxxx xx xxx xxx Smith xxx -$1. If xxxx xxx the same xxxxxxx the $100 xx split xxxxxx between them. xxxxxx xxxx each xx xxxx has xxxx two xx xxxxx on xxxxx xxxxxxx three xxxxxxxx xxxxx xxx xxx or $2. xxxxx xxx xxx payoff xxxxxx xxx this game, xxx xxxx find its Nash xxxxxxxxxxxx
Payoff matrix xx xxx xxxx
xxxx equilibrium is xxx xxxxxx’s most possible best xxxxxxxx based xx xxx xxxxx’x most xxxxxxxxx action. xx the xxxxx case xxx Nash equilibrium will xx (98, xxx or xxxx xxx players will bit $2.
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