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Matching pennies. In this simple two-player game, the players (call them Rand C) each choose an outcome, heads or tails. If both outcomes are equal, Cgives a dollar to R; if the outcomes are different, Rgives a dollar to C.

(a) Represent the payoffs by a2×2 matrix.

(b) What is the value of this game, and what are the optimal strategies for the two players?

Short Answer

Expert verified

The value of the game is0 and the optimal strategy of both the player will be equal i.e., 12.

Step by step solution

01

Represent the payoffs by a matrix.

(a)It is given that forR to win, the two coins must have same outcome, i.e., either both heads or both tails.

The above condition can be represented as:

H

T

H

+1

-1

T

-1

+1

The matrix represents the moneyR got by game.

H=Head,T=Tail

+1indicates thatR got a dollar whereas-1 shows thatC got a dollar.

02

Calculate the value of this game and the optimal strategies for the two players

(b)

Let, Probability of Rto get head and tail be given asX1and X2.

And, Probability of Cto get head and tail be given as y1and y2.

Max:z: Min:w

z≤x1−x2 â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰z≤−x1+x2 â¶Ä‰â¶Ä‰â¶Ä‰x1+x2=1 â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰â¶Ä‰â€‰x1,x2>0 â¶Ä‹â¶Ä‹â¶Ä‰â¶Ä‰â¶Ä‰

 w≥y1−y2w≥−y1+y2y1+y2=1y1,y2>0

The value of this game is0 .

Therefore, the optimal strategy of both the player is equal to i.e., 12.

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