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       #Post#: 22--------------------------------------------------
       Q6
   DIR By: Julia.Wirtz
       Date: November 22, 2012, 7:11 am
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       I'm posting a question I got per email and my answer:
       Question
       What is the answer (solution) of Bayes-Nash equibrium?
       In question 6), we got two cut off points. So the Bayes-Nash
       equibrium
       is "the seller trade if his value (c) is less than 2/3, and the
       buyer
       trade if his value (v) is greater than 1/3"?
       I don't think the cut off points themselves are not the
       Bayes-NE.
       Answer
       Yes, these are the equilibrium strategies of the players. To be
       precise, to give a full Bayes NE, you also have to state the
       equilibrium beliefs of the players. Here this is simply that
       they have
       correct expectations about each other's cutoff points:
       The Buyer believes: I will trade with sellers with a cost: 0 <=
       c <= 2/3.
       The Seller believes: I will trade with buyers with a value: 1/3
       <= v <= 1.
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