ECON

profilejjakda
A selfless person approaches Jones and Smith with a $100 bill and offers to sell it to the highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $2 and Smith bids $1 they pay a total of $3, but Jones gets the money, leaving him with a net gain of $98 and Smith win -$1. If both bid the same amount, the $100 is split evenly between them. Assume that each of them has only two $1 bills on hand, leaving three possible bids: $0, $1, or $2. Write out the payoff matrix for this game, and then find its Nash equilibrium.
    • 13 years ago
    • 3
    Answer(1)

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      jones_and_smith.docx
    Bids(0)
    other Questions(10)