9. (5 points) The centipede game is a sequential move game in which two players...
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9. (5 points) The centipede game is a sequential move game in which two players take turns choosing either to take a larger share of a slowly increasing pot, or to pass the pot to the other player. The game is illustrated below: a 1 C2 C1 C" 20" 8,0 S S" S' 0,5 S" 0,7 4,0 6,0 a. (1 point) What is the SPNE equilibrium of this game? b. (2 points) Assume that both players behave as level-k thinkers, with Level choosing randomly between stopping and continuing. How will Level 1 Player 1 and Level 1 Player 2 behave? C. (2 points) Assume that both players behave as level-k thinkers, with Level 0 always choosing to continue. How will Level 1 Player 1 and Level 1 Player 2 behave? 9. (5 points) The centipede game is a sequential move game in which two players take turns choosing either to take a larger share of a slowly increasing pot, or to pass the pot to the other player. The game is illustrated below: a 1 C2 C1 C" 20" 8,0 S S" S' 0,5 S" 0,7 4,0 6,0 a. (1 point) What is the SPNE equilibrium of this game? b. (2 points) Assume that both players behave as level-k thinkers, with Level choosing randomly between stopping and continuing. How will Level 1 Player 1 and Level 1 Player 2 behave? C. (2 points) Assume that both players behave as level-k thinkers, with Level 0 always choosing to continue. How will Level 1 Player 1 and Level 1 Player 2 behave
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