# Econ- to stand or not to stand

In a scene at the end of The Princess Bride, the hero, Wesley, confronts the evil Prince Humperdinck. This interaction can be modeled as the following game.

Wesley can either be strong or weak, as randomly picked by nature with equal probability. Wesley,knowing if he is strong or weak, can then choose to stand or continue lying on the bed.  The prince observes this decision but does not know Wesley’s type  and chooses to fight or surrender. The prince can beat a weak Wesley (Wesley was “mostly” dead only a few hours earlier) and can really beat up a weakWesley who stays in bed. If a weak Wesley stands and the prince fights, then the base payoffs are 1 for the prince and -1 for Wesley. If Wesley stays in bed, then the prince gets 2 and Wesley still gets -1. If Wesley is weak and the prince surrenders, regardless of whether Wesley has stood or not the base payoffs are 1 for Wesley and 0 for the prince. A strong Wesley, however, will destroy the prince and enjoy doing it should the prince try to fight. It is easier for Wesley to beat the Prince if he stands, though, so in that case he gets a payoff of 3 while the prince gets -2. If Wesley stays in bed and the Prince chooses to fight, the payoffs are 1 for Wesley and -1 for the prince. In the event that the prince chooses not to fight, Wesley gets 2 if he stands and 1 if he stays in bed while in either case the prince gets 0. The final complication to the payoffs is that if Wesley is weak, standing costs him some extra amount c, while it costs a strong Wesley nothing.

a) (5 points) derive the extensive form of the game

b) (10 points) derive a pooling BNE where q= 0.5 represents the prince’s initial belief that Wesley is weak. Be sure to include what are the prince’s beliefs about Wesley’s type if he observes Wesley in bed or observes him standing. Find the range of values for c that makes the belief valid.

c) (10 points) derive a separating BNE for this game as well as the range of c over which it is valid.

Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

### Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

### Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors: