SERVER Forehand Backhand Forehand 90,1 0,10 RECEIVER Backhand 0,10 6,4The idea in this game is to see what happens to Game 1 when one payoff- (9,1)-- is drastically changed-- to (90,1). It's not tennis anymore, but let's see what happens.

2_1 What is the Nash equilibrium probability of Forehand for the Server?

A. Zero.

B. More than 0 but less than or equal to .2

C. Greater than .2 but less than .5.

D. Between .5 and .7, inclusive

E. Greater than .7

D. Try again. The Server must choose a low probability of Forehand, or the Receiver will take advantage of him by also choosing Forehand.

If the server chooses a probability of .5, then

Receiver's Payoff (Forehand) = .5 (90) + .5(0) = 45 > Receiver's Payoff (Backhand) =.5(0) + .5 (6) = 3.

To get the correct answer, you need to choose a mixing probability X for the Server such that the Receiver does no better from Forehand than from Backhand. To do that, you solve

Receiver's Payoff (Forehand) =X (90) + (1-X)(0) = Receiver's Payoff (Backhand) =X(0) + (1-X) (6).

Return to Self Test 2.

Send comments to Prof. Rasmusen. Last updated: December 2, 1996