Question 12
Mohan and Charan, both students of game theory at IIT Chennai, are fans of old board games. This year the Indian-Board-Game-Day, a big fair, is held in Chennai and naturally both go to see what is offered. They both end up at one stand where the ancient board game “Chaturanga” is offered in a second price auction. If they both bid the same, the winner is decided with the toss of a coin (and the winner pays the bid, as the second bid coincides with the first). While both of them are of course very interested, nobody else cares about the old game and participates in the auction. Mohan and Charan know each other well. In particular, they both know the willingness to pay for the game of the other. Mohan is willing to pay ₹80000, while Charan’s maximum willingness to pay is ₹100000. The only admissible bids are 50, 70, and 90 thousand of INR. Represent the situation as a normal form game and answer the given subquestions:
For Charan, playing 90000 strictly dominates playing 50000.
True
False