2. Cindy and Andy are both workers on a team. At the same time both workers can choose to work on the risky project (R) or the safe project (S). If both choose to work on the R project the payoffs are 5 to Cindy and 4 to Andy. If both work on the S project the payoffs are 4 to Cindy and 5 to Andy. If Cindy works on R and Andy on S, the payoffs are (8, 10) to Cindy and Andy respectively. Finally, if Cindy plays S and Andy plays R, the payoffs are (10, 7). a. What are the Nash equilibria of the game? Interpret your equilibria in terms of a firm using teams. b. Now assume that Cindy can move first and choose which project to work on. Andy observes Cindy's choice before making his choice of either R or S. What are the subgame perfect equilibria of the game? Interpret this sequential game in terms of

2. Cindy and Andy are both workers on a team. At the same time both workers can choose to work on the risky project (R) or the safe project (S). If both choose to work on the R project the payoffs are 5 to Cindy and 4 to Andy. If both work on the S project the payoffs are 4 to Cindy and 5 to Andy. If Cindy works on R and Andy on S, the payoffs are (8, 10) to Cindy and Andy respectively. Finally, if Cindy plays S and Andy plays R, the payoffs are (10, 7). a. What are the Nash equilibria of the game? Interpret your equilibria in terms of a firm using teams. b. Now assume that Cindy can move first and choose which project to work on. Andy observes Cindy's choice before making his choice of either R or S. What are the subgame perfect equilibria of the game? Interpret this sequential game in terms of

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q2
Table 8. This table shows a game played between two players, A and B. The payoffs are given in the table as (Payoff to A, Payoff to B). A Select one: Up Middle Down Left (4,2) a. Middle-Center O b. Down-Center (3, 1) (1,3) B Center (2,5) (5, 3) (4,4) Refer to Table 8. This table shows a game played between two players, A and B. The payoffs in the table are shown as (Payoff to A, Payoff to B). Which of the following outcomes represents a Nash equilibrium in the game? Right (3, 3) (5,2) (6, 1) O c. Up-Left O d. More than one of the above is a Nash equilibrium in this game.
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GAME 5 Player B B1 B2 Player A A1 7,3 | 5, 10 A2 3, 8| 9, 6 In Game 5 above, O Neither player has a dominant strategy. O Player B has a dominant strategy. O Player A has a dominant strategy. O Both players have dominant strategies.
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