2. The exercises from class the class on June 26, Thu: Are the following BNE of

Question

2. The exercises from class the class on June 26, Thu: Are the following BNE of the Gunfight game? a. All players wait regardless of their type. b. Only a slow player draws. As a reminder the Gunfight Game has two players (A and B) deciding on whether to draw their gun or wait. Player A is a fast shooter with probability 0.65, and a slow shooter with probability 0.35. Player B is fast with probability 0.6, and slow with probability 0.4. Payoffs: If both players wait, regardless of types, each player gets a payoff of 50. If both players draw their guns, and if their types match (i.e. the types are the same) each get a payoff of 20. If both draw but the types do not match, the fast player gets 30 while the slow player gets -40. If one player draws while the other one waits, and the types match, the player that has drawn the gun gets 30 while the player that has waited gets -40. If one player draws while the other one waits, the types do not match, And the player that has drawn the gun is fast, he gets 30 while the player that has waited (who is slow) gets -40. And the player that has drawn the gun is slow both get 20.

Explanation / Answer

when both players wait regardless of their type then player player A with probability 0.65 will get payoff of 50 and B with probability 0.6 will also get payoff 50

only aslow player draws then B will get payoff of 30 Whereas A will get payoff -40.

Thank You.

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