Question

I just need E and F answered. I have attached answers a-d

1. Game Theory Consider a scenario where two local restaurants are considering the adoption of a new third party delivery service. The delivery service will allow the restaurants to reach a larger customer base (Increasing revenue), but the cost involved has the potential to be quite high. The delivery service has offered its services to both restaurants at a reduced price, but only if both restaurants adopt. The restaurants must simultaneously decide whether to adopt or reject the delivery service, which we can model as a two player game below. Player 2 Adopt Reject 12, 12 8,9 Adopt Player 1 Reject 9,8 10,10 a) Which outcome is the best for both restaurants? b) Find all Nash equilibria in the simultaneous move game. e) Now suppose that Player 1 were able to move first, and Player 2 was able to observe Player l's choice before making their own choice. Depict the extensive form of this game. d) Using the same assumption as in part (e), find all Nash equilibria in the sequential move e) Repent parts (e) and (a) where now Player 2 moves first and Player 1 can observe Player 2's choice before making their own choice. ) Compare the results from parts (d) and (e). Provide an explanation as to why they are the same or different.

Answer 1

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