Sample cover letter for Internship position at Credit Suisse

S5), (S1, N4, S5), (S1, S4, N5), and (S1, S4, S5). Tinman has two strategies: (t2) and (b2). Lion has two strategies: (u2) and (d2).

S3. (a) Beginning with Tinman, we see that Tinman prefers a payoff of 2 over 1, so Tinman chooses t. With Tinman choosing t, Scarecrow receives a payoff of 0 for N and 1 for S, so Scarecrow chooses S. Thus, the rollback equilibrium is Scarecrow’s choosing S and Tinman’s choosing t (even though he won’t have a chance to play it). Tinman’s action does not affect the rollback equilibrium, because Scarecrow expects Tinman to choose t, so Scarecrow best responds by choosing S.

(b) The graph below indicates which action Scarecrow and Tinman choose at each node. Scarecrow’s equilibrium strategy is S1, S3, N5, and Tinman’s is n2, n4, s6. yielding the equilibrium payoff (4,5).

(c) The graph below indicates which action Scarecrow, Tinman, and Lion choose at each node. Scarecrow’s equilibrium strategy is N1, N4, N5; Tinman’s is b; and Lion’s is d, yielding the payoff (2, 3, 2).

S4. The game tree is shown below.

Boeing prefers $300 million to losing $100 million, so Boeing will peacefully accommodate Airbus’s entry into the market. Airbus expects Boeing to accommodate its entry peacefully, so it can make $300 million by entering, or nothing by not entering, so Airbus will enter the market. Thus, the rollback equilibrium is Airbus’s entering the market and Boeing’s peacefully accommodating, with a payoff to each firm of $300 million in profit.