Consider the Matching Pennies Game: Suppose Player B Always

question 150

Multiple Choice

Consider the Matching Pennies game: Suppose Player B always uses a mixed strategy with probability of 3/4 for head and 1/4 for tails. Which of the following strategies for Player A provides the highest expected payoff?

• A) Mixed strategy with probability 1/4 on heads and 3/4 on tails
• B) Mixed strategy with probability 1/2 on heads and 1/2 on tails
• C) Mixed strategy with probability 3/4 on heads and 1/4 on tails
• D) Pure strategy in which Player A always selects heads

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Definitions:

Dummy Variable

A variable used to model the effect of categorical independent variables. A dummy variable may take only the value zero or one.

Categorical Independent Variables

Variables that divide subjects into groups but do not allow for any kind of mathematical operation among groups.

Regression Model

The equation that describes how y is related to x and an error term; in simple linear regression, the regression model is y = b0 + b1x + e.

Adjusted Multiple Coefficient

A statistical measure adjusted for the number of variables in a model, used to assess the goodness-of-fit of a regression model.