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Question

In a route-choice simulation, two rescue crews, A and B, each secretly choose either the narrow Pass (P) or a Detour (D). The two crews cannot both use the Pass safely. Their exercise scores, in points, are specified by the following game table; the first number is A's score and the second is B's:

A's choice B chooses P B chooses D
P \((−4, −5)\) \((5, 1)\)
D \((1, 4)\) \((2, 2)\)

Each crew wants to maximise its own expected score. First find the mixed Nash equilibrium in which each crew independently randomises its route. Then a dispatcher offers a different arrangement: they draw a joint pair of route recommendations, send each crew only its own recommendation, and announce the lottery's probabilities in advance. Neither crew sees the other message. Construct a joint lottery, using \((P,D)\), \((D,P)\) and \((D,D)\) with positive probabilities and never \((P,P)\), that makes both crews better off in expectation than the independent mixed equilibrium. Verify that neither crew gains by disobeying either recommendation, given what that message tells them.

Hint 1

For independent mixed Nash, make each crew indifferent between P and D given the other's mixing probability. With a private recommendation, update what each crew believes about the other message.

Try the joint lottery assigning probabilities \(\frac25,\frac25\) and \(\frac15\) to \((P,D)\), \((D,P)\) and \((D,D)\). For each crew, compare obey-versus-deviate conditional on receiving P and again conditional on receiving D.

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