1. Consider a game of chicken: two players approach a narrow bridge with roomonly for one, and each chooses either to go through and hope the other guybacks off (call this action H, for "hawk"), or backs off to let the other gothrough (call this action D, for "dove"). If both players are normal, then eachgets a payoff of -1 from a collision (i.e. if both choose H), 1 if they choose Hagainst D, 0 if they choose D (regardless of what the other player chooses).Now perturb the game as follows: there is a chance p > 0 that P2 is a “violenttype", who gets 1 from playing H regardless of Pl's action, and -1 from playingD, again regardless of P1's action.(a) Illustrate the game tree corresponding to the Harsanyi transformation ofthis game (i.e. the dynamic game of imperfect information in which naturemoves first).(b) Illustrate the extended game (i.e. the normal form game corresponding toyour game tree in part (a)).(c) Find all values of p for which there is a BNE in which P1 chooses eachaction with chance ½, violent P2 chooses H, and normal P2 uses a mixedstrategy.

The given problem is a variant of the classic game of chicken, which is a game-theoretic model used…

Answered: 1. Consider a game of chicken: two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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To Vote or Not to Vote Mr. and Mrs. Ward typically vote oppositely in elections and so their votes “cancel each other out.” They each gain two units of utility from a vote for their positions (and lose two units of utility from a vote against their positions). However, the bother of actually voting costs each one unit of utility. Diagram a game in which they choose whether to vote or not to vote. Mrs. Ward vote. don't vote Mr. Ward Vote. -1, -1. 1, -2 don't vote. -2, 1. 0,0?
If the players play pure strategies, the game has no Nash equilibrium. But what if they choose their moves randomly? Let each player instead opt for a mixed strategy instead of a pure strategy. The first will play action Z with probability p, and the second will play action L with probability q. At which pair (p, q) are the mixed strategies of the players in equilibrium? At which pair (p, q) does neither player want to change strategy? When are both strategies simultaneously the best response?
Return to the game between Monica and Nancy in Exercise U10 in Chapter 5. Assume that Monica and Nancy choose their effort levels sequentially instead of simultaneously. Monica commits to her choice of effort level first. On observing this decision, Nancy commits to her own effort level. What is the subgame - perfect equilibrium of the game where the joint profits are 5m + 4n+ mn, the costs of their efforts to Monica and Nancy are m2 and n2, respectively, and Monica commits to an effort level first? Compare the payoffs to Monica and Nancy with those found in Exercise U10 in Chapter 5. Does this game have a first-mover or second - mover advantage? Using the same joint profit function as in part (a), find the subgame - perfect equilibrium for the game where Nancy must commit first to an effort level. U10. Return to the game between Monica and Nancy in Exercise U10 in Chapter 5. Assume that Monica and Nancy choose their effort levels sequentially instead of simultaneously. Monica commits…
2. Consider the two-player strategic form game represented in the following payoff table: t 1 m b 7,2 1,2 3,7 2 M 2,4 3,4 1,6 R 1,3 7,1 4,2 Player 1 chooses between rows, S₁ = {t, m, b), and receives the first listed payoff in each cell. Player 2 chooses between columns, S₂ = {L, M, R), and receives the second listed payoff in each cell. a. Does either player have a strictly dominant strategy? Explain. b. Explaining your steps carefully, identify the set of rationalizable strategies in this game. c. Making sure to explain your solution method, solve for all pure strategy Nash equilibria in this game.
Suppose Antonio and Trinity are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Antonio chooses Up and Trinity chooses Down, Antonio will receive a payoff of 7 and Trinity will receive a payoff of 5. Trinity Up Down Up 4,8 7,5 Antonio Down 3,2 5,6 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Antonio chooses, and Trinity chooses Grade It Now Save & Continue Continue without saving @ 2 F2 #3 80 Q F3 MacBook Air 44 F7 Dll F8 44 F10 74 $ 4 05 Λ & % 5 6 7 8 * 0 Q W E R T Y U 1 A N S X 9 0 -O O D F G H J K L on را H command C > B N M Λ - - P [ H Λ command opti
Mr. and Mrs. Ward typically vote oppositely in elections and so their votes “cancel each other out.” They each gain two units of utility from a vote for their positions (and lose two units of utility from a vote against their positions). However, the bother of actually voting costs each one unit of utility. Diagram a game in which they choose whether to vote or not to vote.
2. Consider the following "centipede game." The game starts with player 1 choosing be- tween terminate (T) and continue (C). If player 1 chooses C, the game proceeds with player 2 choosing between terminate (t) and continue (c). The two players choose be- tween terminate and continue in turn if the other player chooses continue until the terminal nodes with (player l's payoff, player 2's payoff) are reached as shown below. TTTT Player 1 Player 2 Player 1 Player 2 (3, 3) t (1, 1) (0, 3) (2, 2) (1, 4) (a) List all possible strategies of each player. (b) Transform the game tree into a normal-form matrix representation. (c) Find all pure-strategy Nash equilibria. (d) Find the unique pure-strategy subgame-perfect equilibrium.
the Consider a simultaneous-move integer game between two players: Marilyn and Noah. Each of player is required to announce a positive integer between 1 to 4. In other words, a player can announce 1, 2, 3, or 4. Two players announce their integers simultaneously. Notice that this game is different from the games we learned in class in that each player has four actions to take. The payoffs of the players in the game are specified as follows: (1) when the two announced integers are different, whoever reports the lower number pays $1 to the other player, so that the loser of the game has payoff -1 and the winner of the game has payoff 1; (2) when the two players announce the same integer, their payoffs are both O. What is Marilyn's maximin strategy? 01 02 03 O
Consider the following two player game. In each cell the first number refers to the payoff to Player 1 while the second number refers to the payoff to Player 2. Suppose the two players move simultaneously (at the same time). Which one of the following statements is CORRECT? Player #1 Player #2 Top Bottom Left 7.7 4.0 Right 0,4 4,4 O There are three equilibria in this game: two pure strategy equilibria at [Top, Left] and [Bottom, Right) and al third equilibrium in mixed strategies. In the mixed strategy equilibrium of this game. Player 1 should play Top with probability 2/5 and Bottom with probability 3/5; Player 2 should play Left with probability 2/5 and Right with probability 3/5. O There are three equilibria in this game; two pure strategy equilibria at (Top. Left) and (Bottom, Right) and a third equilibrium in mixed strategies. In the mixed strategy equilibrium of this game, both players should randomize over the strategies with probability and %. O There is a unique dominant…
Consider the following static, single-shot game played between two cyclists, Chico and Loco, who find themselves riding towards each other down a narrow lane. Chico wants to pass by safely, and he can only do this by cycling on the opposite side of the lane to Loco. So, he has two options: to cycle on the Right of the lane, or to cycle on the Left. Loco meanwhile is having a bad day and wants to crash into Chico, and the way he can achieve this is by cycling on the same side of the lane as Chico. So again, he has two options: to cycle on the Right of the lane, or to cycle on the Left. He does not care at all about hurting himself if they collide. (c) By constructing the best response lines of both players, identify all Nash equilibrium outcomes in the above game i.e., in pure and mixed strategies. (d) Provide an intuitive interpretation of the equilibrium outcome(s) identified in part (c) above.
Keith and Blake play a simultaneous one-shot game. Keith chooses between Top and Bottom, whereas Blake chooses between left and right. Payoffs are given by (Keith's payoffs are listed first and Blake's payoffs second): Top+left: 3,-6. Top+right:0,-7 Bottom+left:4,0. Bottom+right:-2,6. In a mixed strategy equilibria, Keith will play Top with what probability? 1. 6/7 2. 1/4 3. 1/2 4. 1/7 5. 0 6. 3/4
Consider the payoff matrix for a game depicted below. Player 1 selects the row and Player 2 selects the column. Up Down Left 1, -1 -1, 1 Right -1, 1 1, -1 What is (are) the Nash equilibrium (equilibria)? Question 18Answer a. Player 1 plays right; Player 2 plays down b. Player 1 plays left; Player 2 plays down c. Player 1 plays down; Player 2 plays left d. Player 1 plays right; Player 2 plays up e. Player 1 plays up; Player 2 plays left f. There is no Nash equilibrium g. Player 1 plays down; Player 2 plays right h. Player 1 plays up; Player 2 plays right i. Player 1 plays left; Player 2 plays up

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