Prisoners'dilemma of incomplete information contd ■So| ution Prisoner 1 chooses to confess, given his belief on prisoner 2 Prisoner 2 chooses to confess if he is rational and mum if he is altruistic ■ This can be written as (Confess, (Confess if rational, Mum if altruistic) Confess is prisoner 1's best response to prisoner 2's choice(Confess if rational, Mum if altruistic a (Confess if rational, Mum if altruistic)is prisoner 2's best response to prisoner 1,s Confess u A Nash equilibrium called Bayesian Nash equilibriumPrisoners’ dilemma of incomplete information cont’d ◼ Solution: ➢ Prisoner 1 chooses to confess, given his belief on prisoner 2 ➢ Prisoner 2 chooses to confess if he is rational, and mum if he is altruistic ◼ This can be written as (Confess, (Confess if rational, Mum if altruistic)) ◼ Confess is prisoner 1’s best response to prisoner 2’s choice (Confess if rational, Mum if altruistic). ◼ (Confess if rational, Mum if altruistic) is prisoner 2’s best response to prisoner 1’s Confess ◼ A Nash equilibrium called Bayesian Nash equilibrium 9