Equilibrium redraw threshold in a uniform duel
Question
Two players each privately draw a value from . Each may, without the other knowing, discard their value and take a fresh draw instead, which they must keep. The higher final value wins. In equilibrium both players use a rule of the form "redraw if below ". Find to three decimal places.
Short answer
. Against an opponent using threshold , compute your winning probability as a function of your own threshold by splitting on who redraws. In equilibrium the player holding exactly must be indifferent between keeping it and redrawing, which reduces to .
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Open the worked solutionLessons behind this question
- Conditional Probability, Total Probability, and Bayes' Rule
- Worked Examples — Probability Trees, Monty Hall, and Bayesian Updating
- Continuous Random Variables and Probability Density Functions
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