Sam and dan are twins who like playing tricks on each other


Sam and Dan are twins who like playing tricks on each other. Sam is deciding wheter to take Dan's blanket. Sam has a utility of 0 if he doesn't tale Dan's blanket. If Sam takes Dan's blanket, there is a possibility of Dan retaliating by taking Sam's pillow, thereby earning Sam a utility of -5. If Dan doesn't retaliate, Sam gets a utility of 5. Dan has a utility of 10 if Sam doesn't take his blanket. If Same takes his blanket, Dan's utility is -10. Dan's utility changes by X if he retaliates.

a) Draw the game tree.

b) For what values of X would we observe Sam taking Dan's blanket in the backward induction equilibrium?

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Sam and dan are twins who like playing tricks on each other
Reference No:- TGS02184285

Expected delivery within 24 Hours