TEORIA DE JUEGOS Y ESTRATEGIA

PROBLEM SET 3 SOLUCIONES

(a) The ex-ante normal form is given in Figure 1. The first letter in a strategy of
Player 2 indicates his action when his value is 4 and the second letter the action
when his value is 6.

1 \2 FF FQ QF QQ
F −2, −2 1, −1 1, −1 4, 0
Q 0, 5 0, 2 0, 3 0, 0

Figure 1. Ex-ante Normal Form

(b) By inspection, there are two pure strategy Bayesian-Nash equilibria: (Q, FF) and
(F, QQ).
Notice that whenever Player 1 is playing a pure strategy, Player 2 has a unique
best response. Thus in any Bayesian-Nash equilibrium other than the two pure
strategy equilibria found above, Player 1 must be strictly mixing between her two
pure strategies.
Also, notice that Player 2’s strategy FQ is weakly dominated by QF. If Player
1 is strictly mixing, FQ cannot be a best response. Hence we can ignore FQ when
finding the remaining Bayesian-Nash equilibrium.
Let p be the probability Player 1 plays F. Now to Player 2, the expected utility
from each of the remaining 3 pure strategies are

U2 (F F, p) = −2p + 5(1 − p)
U2 (QF, p) = −p + 3(1 − p)
U2 (QQ, p) = 0.

If we plot these at a function of p, we get Figure 2.

We claim that Player 2 must put probability strictly between 0 and 1 on FF
in a mixed strategy equilibrium. If Player 2 puts zero probability on FF, then F
is always the best response for Player 1. This means we cannot get Player 1 to
mix between F and Q. Similarly, if Player 2 puts probability 1 one FF, Q is the
best response for Player 1 and we cannot get Player 1 to mix between F and Q.
Therefore Player 2 must put probability strictly between 0 and 1 on FF.
But this means Player 2 must be indifferent between FF and another pure strat-
egy, and both of them has to yield the highest expected payoff given p. Looking
Date: January 9, 2018.

1
 5
FF
3
QF

QQ
0 0
−1
−2
p
0 2 3 1
3 4

Figure 2. Expected Payoffs from Player 2’s Pure Strategies

at Figure 2, this is possible only at p = 2/3, when Player 2 is indifferent between

FF and QF. (For p < 2/3, FF is the unique best response; for p > 2/3, FF is not
a best response.) Hence p = 2/3 in a Bayesian-Nash equilibrium.
Finally we need to determine Player 2’s mixture. Let q be Player 2’s probability
of playing FF and 1 − q his probability of playing QF. For Player 1 to be willing
to mix, q must satisfy

−2q + (1 − q) = 0
1
q= .
3
Therefore the mixed strategy Bayesian-Nash equilibrium is ((2/3, 1/3), (1/3, 0, 2/3, 0)).