Consider a game with two players, 3′ = 1, 2 where each has a continuous strategy, 3,; E [0, 4], for 2′ = 1, 2. Suppose that the best response…

Find undominated strategies and unrationalizable strategies

7. Consider a game with two players, 3′ = 1, 2 where each has a continuous strategy,3,; E [0, 4], for 2′ = 1, 2. Suppose that the best response functions are the same for bothplayers and are given by: +l-s- ifs-E 0,1B.R§(Sj)= 2 J J l ) IbIUI plan if s, E [1, 4}(a) Characterize the set of undominated strategies in this game, and describe theresulting reduced game R1. (b) Characterize the set of undominated strategies in the reduced game R1 and describe the resulting reduced game R2. (c) Characterize the set of rationalizable strategies in this game.

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