Question

(2) Let us slightly change the game described in question 1. Suppose Beth and Mike will be going to the movie after work, and have planned to meet directly at the theater. The comedy and the drama are playing at different theaters. Unfortunately. Beth and Mike forgot to discuss where they should meet (i.e., which movie to go to). After work. Beth couldn't reach Mike's phone, and decides to head out to a theater and waits there for Mike. Mike had to stay a bit late at work, but manages to head out for the movie well before the show time. However. Mike does not have any information on which movie Beth may have decided to go to. He decides by his own, and goes to the theater where his chosen movie is playing. PROBLEM SET 1 Suppose the payoffs of Beth and Mike are kept unchanged. If theyland up in different theaters, both get 0. If they both choose comedy, Mike gets 5 and Beth gets 2; if they both choose drama. Mike gets 2 and Beth gets 5 (a) Is this a simultaneous game or a sequential game? (i) Define Mike and Beth's information sets. (ii) write down Mike and Beth's strategy sets. (b) Now suppose, Beth does manage to get hold of Mike by phone. Before she goes to the theater, she tells Mike which movie she is going to. Let us keep all other aspects of the game unchanged (i) Is this a simultaneous game or a sequential game? (ii) Show the extensive form representation of this game

Answer 1