Question

Consider a dynamic game of “The Office or Parks and Rec”. There are two people who are trying to make a decision about attending either “The Office” convention in Pennsylvania or the “Parks and Rec” convention in Indiana. The two would be happy if they both attended the same venue, but obviously one would prefer to attend her choice of preferred TV-show.

Suppose that player 1 announces her choice first then player 2 announces her choice. Assume that player 1 likes The Office and player 2 likes Parks and Rec. Their payoffs are given as follows:

• If they both attend The Office convention, the payoff will be (10,7)

• If they both attend Parks and Rec convention, the payoff will be (7,10)

• If player 1 attends The Office convention and player 2 attends Parks and Rec convention, the payoff will be (5,5)

• If player 1 attends Parks and Rec convention and player 2 attends The office convention, the payoff will be (3,3)

(a) (5 points) Write down the actions & strategies of player 1 and player 2.

(b) (5 points) Write down the game in Normal form.

(c) (5 points) What is the Nash Equilibrium?

(d) (5 points) Write down the game in extensive form

(e) (5 points) How many subgames are there in this game?

(f) (5 points) What is the SPNE?

(g) (5 points) What is the outcome of the game?

Answer 1