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Fidel (1 st mover) must decide whether or not to declare the Cuban cigars in his luggage. Note that he has 30 cigars but can only declare 15 cigars.
●Fidel "Declare", TSA "Inspect" → (15,15)
●Fidel "Declare", TSA "Don't Inspect" → (30,0)
●Fidel "Don't Declare", TSA "Inspect" → (0,30)
●Fidel "Don't Declare", TSA "Don't Inspect" → (30,0)
a. Set up the extensive form of this game (i.e. draw the game tree).
b. Describe the best response strategies for both players.
c. Define all nash equilibrium in this game.
d. Should Fidel declare the cigars?