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Business, 12.03.2021 14:50 mathnation1

g Consider the following payoff matrix for a one-shot simultaneous move game between players 1 and 2: Player 2 Up Down Player 1 Up (α, 3) (2, 0) Down (, µ) (1, σ) , where the first entry in each cell is the payoff for Player 1, the second for Player 2 and where α, , µ and σ are integers. (i) What inequalties must hold between the payoff values if the outcome where Player 1 plays Down and Player 2 plays Up is a Nash Equilibrium? (ii) Convert this normal form game to extensive form and determine the inequalties required for the same outcome, {Down, Up}, to be achieved in a leader-follower (Stackelberg) game where (i) Player 1 moves first; (ii) Player 2 moves first.

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