2. Consider the normal form of the simultaneous game given by table 1. As- sume that both a and b are greater than 0. Table 1: Left Right a,b Up 0,0 Down 0,0 2,2 a) What type of game is this? b) What are the pure strategy Nash equilibrium(s) in the game? c) Re-write the normal form of the game and include the mixed strategy options for both players. Make sure to show the pay-offs. d) What is the mixed strategy Nash equilibrium for the game? e) Draw the best response rules for each plaver and point out the Nash

2. Consider the normal form of the simultaneous game given by table 1. As- sume that both a and b are greater than 0. Table 1: Left Right a,b Up 0,0 Down 0,0 2,2 a) What type of game is this? b) What are the pure strategy Nash equilibrium(s) in the game? c) Re-write the normal form of the game and include the mixed strategy options for both players. Make sure to show the pay-offs. d) What is the mixed strategy Nash equilibrium for the game? e) Draw the best response rules for each plaver and point out the Nash

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Normal Form Game: The table below provides a normal form, 2 x 2 game. The players are Column and Row. Column can choose either LEFT or RIGHT, and Row can choose either UP or DOWN. Their payoffs for each combination of moves are provided in the four boxes. Column Row UP DOWN The combination of moves (UP, LEFT) is a Nash-Equilibrium. A. False O B. True 2 LEFT -1 -7 3 6 RIGHT -5 -10
Consider the following game. Which one of the following statements is FALSE? 1. There are 7 subgames in this extensive-form game. 2. There are 6 proper subgames in this extensive-form game. 3. (BK, CE) is a Subgame Perfect Nash Equilibrium. 4. (BK, DE) is a Subgame Perfect Nash Equilibrium
1. Consider the following N-player game. Each agent has a choice of strategy A or B. The state variable is x, the proportion of agents choosing strategy A. For every agent, the utility of choosing strategy A is U(A) = 10 +2x and the utility of choosing strategy B is U(B) = 10+3x. What is the Nash equilibrium to this game? Explain.
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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on Mary, UE, BD UF, AC DF, BC UF, BD DE, AC DE, BC Nancy U D Nancy -5,4 Mary -0,2 -6,2 -2.6 Which of the following answers is a subgame perfect Nash equilibrium in this game? Check all that apply. (Answers below are formatted as Mary's strategy, Nancy's strategy.)
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(The Beckhams' dilemma) Victoria and David are husband and wife. They both prefer ciean to dirty house but neither likes to clean the house. Their payoffs are given in the table below. Victoria Clean Don't clean 0,8 Clean 5,5 David Don't clean 8,0 1,1 a) Let say they play the clean house game only once, what is the Nash equilibrium? b) Let say Victoria and David has to decide whether to clean or not every day for indefinite number of days. How grim-trigger strategy will be our subgame perfect Nash equilibrium? In other words, what is the patience rate that ensure Victoria and David maintain the cleanliness of the house?
Player 1 Up Down [Select] Left 2,4 6,5 Player 2 In the above game, player 1 would play [Select] Right 1,0 4,2 , player 2 would play resulting in a Nash Equilibrium of [Select]
Consider the following sequential game: 1 O D,L U.L U,R U D,R D (0,2) 2 L What is the subgame perfect Nash equilibrium of this game? R. (-1,-1) (1,1)