FIN207: Bob and Linda are playing a game. Suppose there are two wallets (A and B), and each wallet contains: Game Theory and Design Thinking Assignment, SUSS, Singapore

Question 1

Bob and Linda are playing a game. Suppose there are two wallets (A and B), and each wallet contains 2-3 pieces of notes. Bob is responsible for picking out a wallet, and Linda is responsible for choosing one note from the wallet selected to Bob and the max one of the other notes in that wallet to herself. They both aim to maximize their profit.

Wallet A contains 3 pieces of notes: $10 (choice of selecting this note to Bob is represented as a), $5 (choice of selecting this note to Bob is represented as b), and $100 (choice of selecting this note to Bob is represented as c), and Wallet B contains

2 pieces of notes: $2 (choice of selecting this note to Bob is represented as d) and $50 (choice of selecting this note to Bob is represented as e).

(a) Interpret the context as a game between Bob and Linda and use Gambit tool (http://app.test.logos.bg/) to present the game.
(b) Write down the strategies for each player and analyse the solution.