Question

	Haymitch Prices Low	Haymitch Prices High
Yoda Prices Low	30, 40	55, 30
Yoda Prices High	25, 70	50, 50

a.Are there any pure strategy Nash equilibria? Explain

b.Is there a mixed strategy Nash equilibrium? Explain

c.Is there any advantage for Haymitch to choose first? How about Yoda?

Answer 1

Answer for 1

Yes we have PSNE here and that is equal to (Yoda low,Haymitch low)

Ans for 2

No there is no mixed strategy Nash equilibrium because both the players have their own dominant strategy

Hence they will choose that dominant strategy with certainty

Therefore no mixed strategy Nash equilibrium here

Ans for 3

Haymitch decudes first then he will decide low prices as he knows in any case he has an expected payoff of (70+40/2)=55

And again original NE achieved therefore no first mover advantage

Similarly if Yoda plays first even then NE is acheived that is previously discussed

Hence no first mover advantage