Tracy and Amy Are Playing a Game in Which Tracy

question 120

Multiple Choice

Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch. In the equilibrium of this game:

• A)Tracy and Amy both get 125.
• B)Tracy gets 75 and Amy gets 150.
• C)Tracy gets 300 and Amy gets 200.
• D)Tracy gets 25 and Amy gets 225.

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Definitions:

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation.

Theory

A system of ideas or principles intended to explain certain phenomena or observations, grounded in evidence and subject to testing.

Positively Correlated

A connection between two factors in which a rise in one is connected to a rise in the other.

Cause-effect Relationship

A connection between two events where one (the cause) directly results in the other (the effect).