(See Problem 2

question 13

Multiple Choice

(See Problem 2.) Arthur and Bertha are asked by their boss to vote on a company policy. Each of them will be allowed to vote for one of three possible policies, A, B, and C. Arthur likes A best, B second best, and C least. Bertha likes B best, A second best, and C least. The money value to Arthur of outcome C is $0, outcome B is $1, and outcome A is $5. The money value to Bertha of outcome C is $0, outcome B is $4, and outcome A is $1. The boss likes outcome C best, but if Arthur and Bertha both vote for one of the other outcomes, he will pick the outcome they voted for. If Arthur and Bertha vote for different outcomes, the boss will pick C. Arthur and Bertha know this is the case. They are not allowed to communicate with each other, and each decides to use a mixed strategy in which each randomizes between voting for A or for B. What is the mixed strategy equilibrium for Arthur and Bertha in this game?

• A) Arthur and Bertha each votes for A with probabilityand for B with probability.
• B) Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability.
• C) .Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability.
• D) Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability
• E) Arthur votes for A and Bertha votes for B.

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Definitions:

Fair Value

The expected monetary return from disposing of an asset or the expense of relocating a liability in a controlled market interaction at the time of evaluation.

Business Combination

A merger or acquisition in which one entity acquires the assets or shares of another, consolidating the businesses into a single legal entity.

Common Shares

represent units of ownership interest or equity in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Regulatory Restrictions

Rules or limitations set by a regulatory authority that guide or constrain actions within a specific area or industry.