Question

not be considered.Qi Consider a modified form of Matching biased coins game problem. The matching player ispaid Rs 8.00 if the two coins turn both heads and Re. 1.00 if the coins turn both tail. The non-matching player is paid Rs. 3.00 when the two coins do not match. Given the choice of being thematching or non matching player, which one would you choose and what would be yourstrategy. [10 Marks]​

Answer 1

Answer:

-1/15

Explanation:

The matching player ispaid Rs 8.00 if the two coins turn both heads and Re. 1.00 if the coins turn both tail. The non-matching player is paid Rs. 3.00 when the two coins do not match. Given the choice of being the matching or non matching player, which one would you choose and what would be your strategy

Payoff Matrix of the Matching Player can be denoted as:

Matching Player: 8 -3, -3,  1

Here,

Payoff Matrix does not have a saddle point, so players would use mixed strategies i.e. optimum mixed strategies for both matching and non-matching player:

p1 = a22 - a21/ a11 + a22 - (a12+ a21)

p1 = 1 - (-3)/ 8 + 1 - (-3-3) = 4/15

Expected value of the game will be:

v =  a22 - a21/ a11 + a22 - (a12+ a21)

= 8 X 1 - (-3) (-3)/ 8 + 1 - 1 (-3) (-3) = -1/15