For the cheap talk game as shown, find two separating equilibria and two babbling equilibria.

Principles of Economics, 7th Edition (MindTap Course List)
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Author:N. Gregory Mankiw
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Chapter22: Frontiers Of Microeconomics
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For the cheap talk game as shown, find two separating equilibria and two babbling equilibria.

FIGURE 12.2
Nature
Nice
Mean
Probability = .4
Probability = .6
Tom
Tom
Stop
Go
Stop
Go
Jessica
Jessica
Jessica
Jessica
Run
Hide Run
Hide
Run
Hide Run
Hide
Tom
2
Jessica
3
1
1
2
1
2
3.
Transcribed Image Text:FIGURE 12.2 Nature Nice Mean Probability = .4 Probability = .6 Tom Tom Stop Go Stop Go Jessica Jessica Jessica Jessica Run Hide Run Hide Run Hide Run Hide Tom 2 Jessica 3 1 1 2 1 2 3.
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