5.Dating in the Burbs. Cheryl and Derrick are trying to go out on their date. Cheryl can choose either to stay at home and read a book or to go to the movies and perhaps meet up with Derrick. If she reads a book, her payoff is ¾ and Derrick’s payoff is 0. If she chooses to go to the movies then Derrick observes that Cheryl is going to the movies but does not observe which movies Cheryl chooses. The two possible movies are accurate portraits of typical suburban life in the USA. “American Beauty” [excellent] and “Arlington Road”[okay]. If Cheryl goes to the movies, the payoffs are as follows
CherylDerrick
BeautyRoad
Beauty K,10,0
Road 0,01,2
Where k>1
a.Draw the extensive form (game tree) and normal matrix of this game.
b.For what values of k [recall, k>1] will all the sub game perfect equlibria involve. Cheryl’s going to the movies.
CherylDerrick
BeautyRoad
Beauty K,10,0
Road 0,01,2
Where k>1
a.Draw the extensive form (game tree) and normal matrix of this game.
b.For what values of k [recall, k>1] will all the sub game perfect equlibria involve. Cheryl’s going to the movies.