Can I please get a short explanation for these questions? Thank you. A seller is

Question

Can I please get a short explanation for these questions? Thank you.

A seller is selling a product to a buyer. The price for this product is 5. If the buyer buys, the true value she gets from this product is either b 2 or b 10. Suppose that the buyer's prior belief is Prib-2)-0.7 and Prib 10) -0.3 Suppose that the seller knows the true value. Based on this knowledge, he can 'highly recommend' this product or "stay silent In a perfect Bayesian equilibrium, what is the probability that this seller will highly recommend the product when b 2? O a number between 0 and 1 01 O Cannot tell because there may be multiple perfect Bayesian equilibria.

Explanation / Answer

the bayesian theory is an interpretation of" DEGREE OF BELIEF" baysian

theory gives us a complete details of how to compute binomial distribution theory. so in both the cases option d cannot tell because there may be multiple perfect bayesian equilibria.

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