2) Consider the following 2-player, simultaneous move static game summarized by the normal orm payoff matrix below: X ROW Y A 4,3 1,1 COL B 1,1 2,5 3,0 1,1 0,2 3,2 a) Can you eliminate any strategies because they are strictly dominated? Reduce the game as much as possible using common knowledge of rationality and explain any steps taken. (ie: what dominates what?) b) Find all Nash equilibrium strategy profiles for this static game. Be sure to specify which strategy is chosen by each player in the equilibrium (describe the strategies, not the payoffs). c) Identify the Pareto Efficient allocations (describe the strategies, not the payoffs).

2) Consider the following 2-player, simultaneous move static game summarized by the normal orm payoff matrix below: X ROW Y A 4,3 1,1 COL B 1,1 2,5 3,0 1,1 0,2 3,2 a) Can you eliminate any strategies because they are strictly dominated? Reduce the game as much as possible using common knowledge of rationality and explain any steps taken. (ie: what dominates what?) b) Find all Nash equilibrium strategy profiles for this static game. Be sure to specify which strategy is chosen by each player in the equilibrium (describe the strategies, not the payoffs). c) Identify the Pareto Efficient allocations (describe the strategies, not the payoffs).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.6P

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