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  • Exercise Golf or Ski 2021 22

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    maria chaverri agreda
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    Peter and Katie enjoy skiing and golf but have different preferences. Their payoff matrix shows Peter's payoff is listed first for each activity combination. If Katie chooses skiing with 20% probability and golf with 80%, Peter's expected payoff is highest from golf. If Peter chooses golf with 50% probability, Katie's expected payoff is highest from skiing. To find the mixed equilibrium, the probabilities must make each indifferent between activities.

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    Peter and Katie enjoy skiing and golf but have different preferences. Their payoff matrix shows Peter's payoff is listed first for each activity combination. If Katie chooses skiing with 20% probability and golf with 80%, Peter's expected payoff is highest from golf. If Peter chooses golf with 50% probability, Katie's expected payoff is highest from skiing. To find the mixed equilibrium, the probabilities must make each indifferent between activities.

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    4 views1 page

    Exercise Golf or Ski 2021 22

    Uploaded by

    maria chaverri agreda
    Peter and Katie enjoy skiing and golf but have different preferences. Their payoff matrix shows Peter's payoff is listed first for each activity combination. If Katie chooses skiing with 20% probability and golf with 80%, Peter's expected payoff is highest from golf. If Peter chooses golf with 50% probability, Katie's expected payoff is highest from skiing. To find the mixed equilibrium, the probabilities must make each indifferent between activities.

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    © All Rights Reserved
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    of 1

    EXERCISE INDIVIDUAL COURSE WORK 2

    Peter and Katie are thinking on practicing sports together. They both like to play Ski and
    playing golf. But they have different satisfaction obtained from practicing one or the other. The
    matrix of payoffs for them are

        KATIE
        SKI GOLF
    SKI (5 , 4) (2 , 0)
    PETER GOLF (0 , 2) (3 , 3)

    If there is no a unique solution, imagine that Katie decide Skiing with a probability of 20% and
    Golf with a probability of 80%. Which would be Peter payoffs? Would he choose Golf or
    Skiing?

    If Peter probability of playing golf is 50%, which would be Katie´s payoffs? Would she choose
    Golf or Skiing?

    Finally, obtain the mixed equilibrium, finding the probabilities needed from Peter and Katie
    that makes them indifferent to Golf or to Ski and prove it finding the payoffs of the mixed
    equilibrium.

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