2, 26,11,1Player 1 B1,65,51,1C1,11,14,4Consider the simultaneous move game represented in normal form by thispayoff matrix.Suppose that the game is repeated for two periods and the players knowthat the game will end at the end of two periods. They observe the firstperiod outcome before they move to the second period. Assume that thereis no discounting, i.e. 2nd period payoffs are not discounted.Which of the following outcomes could occur in some subgame perfectequilibrium (SPE) of this repeated game? Choose True if you think theoutcome can be a SPE, otherwise choose False.i. (B, B) is played in the first period, (C, C) is played in the second period.ii. (A, A) is played in both periods.iii. (C, C) is played in both periods.

The subgame perfect Nash equilibrium, or SPNE, is defined as the Nash equilibrium of all the…

2, 2 6,1 1,1 Player 1 B 1,6 5,5 1,1 C 1,1 1,1 4,4 Consider the simultaneous move game represented in normal form by thi: payoff matrix. Suppose that the game is repeated for two periods and the players know that the game will end at the end of two periods. They observe the first period outcome before they move to the second period. Assume that ther is no discounting, i.e. 2nd period payoffs are not discounted. Which of the following outcomes could occur in some subgame perfect equilibrium (SPE) of this repeated game? Choose True if you think the outcome can be a SPE, otherwise choose False. i. (B, B) is played in the first period, (C, C) is played in the second period. ii. (A, A) is played in both periods. iii. (C, C) is played in both periods.

2, 2 6,1 1,1 Player 1 B 1,6 5,5 1,1 C 1,1 1,1 4,4 Consider the simultaneous move game represented in normal form by thi: payoff matrix. Suppose that the game is repeated for two periods and the players know that the game will end at the end of two periods. They observe the first period outcome before they move to the second period. Assume that ther is no discounting, i.e. 2nd period payoffs are not discounted. Which of the following outcomes could occur in some subgame perfect equilibrium (SPE) of this repeated game? Choose True if you think the outcome can be a SPE, otherwise choose False. i. (B, B) is played in the first period, (C, C) is played in the second period. ii. (A, A) is played in both periods. iii. (C, C) is played in both periods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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P1| P2 Left Middle Right Left 4,2 3,3 1,2 Middle 3,3 5,5 2,6 Right 2,1 6,2 3,3 Consider the simultaneous move game represented by this payoff matrix. Suppose that the game is repeated for two periods and the players know that the game will end at the end of two periods. They observe the first period outcome before they move to the second period. Assume that there is no discounting, i.e. 2nd period payoffs are not discounted, or the discount factor is equal to 1. Which of the following outcomes could occur in some subgame perfect equilibrium (SPE) of this repeated game? Choose True if you think the outcome can be a SPE, otherwise choose False. a) (Left, Left) is played in both periods. b) (Right, Right) is played in both periods. c) (Middle, Middle) is played in both periods. d) (Middle, Middle) is played in the first period, followed by (Left, Left). e) (Middle, Middle) is played in the first period, followed by (Right, Right).
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Consider the following payoff matrix B R U 7, 7 4,17 A 17,4 6,6 Players A and B repeatedly play this game with an infinite horizon. Future payoffs are discounted with 1/(1+r), where r is the long-term interest rate. Determine the interval of r for which the Carrot-and-Stick strategy does form a Nash-equilibrium when the opponent can discover any deviation immediately. Remember the following relation TA+Lt-1 (14+t) TB TB = TA + O r>0.1 O r0.2 Or-1 O r1
Consider the following game: p 2,10 0,5 5,2 0,5 5,10 Which of the following is FALSE for the SPE of this game? a. If p in [0.6, 1], then playing x is an equilibrim strategy for player 1 b. If p in [0, 0.6], then playing y is an equilibrim strategy for player 1 C. For all possible p values in [0,1], playing x is an equilibrium strategy for player 1 y y R Nature 1 2 1-p y R X 2,10
Paramter y = 0 If ⟨a, d⟩ is played in the first period and ⟨b, e⟩ is played in the second period, whatis the resulting (repeated game) payoff for the row player?
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