3. The following is an interpretation of the rivalry between the United States (USA) andthe Soviet Ünion (USSR) during the cold war. Each side has the choice of twostrategies: Aggressive and Restrained. The payoff table is given as follows:USSRRestrained AggressivenessRestrained4,31,4USAAggressiveness3,12,2a) Consider this game when the two countries move simultaneously. Find all purestrategy Nash equilibria.b) Next consider three alternative ways in which the game could be played withsequential moves: (i) The USA moves first and the USSR moves second. (i)the USSR moves first and the USA moves second. (i) The USSR moves first,and the USA moves second, but the USSR has a further move after the USAmoves. For each case, draw the game tree and find the subgame-perfect Nashequilibrium.c) What are the key strategic issues (commitment, credibility and so on) for thetwo countries.(Note: Be concise. Your answer should not exceed 300 words].

3. The following is an interpretation of the rivalry between the United States (USA) and the Soviet Union (USSR) during the cold war. Each side has the choice of two strategies: Aggressive and Restrained. The payoff table is given as follows: USSR Restrained Aggressiveness Restrained 4,3 1,4 USA Aggressiveness 3,1 2,2 a) Consider this game when the two countries move simultaneously. Find all pure strategy Nash equilibria.

3. The following is an interpretation of the rivalry between the United States (USA) and the Soviet Union (USSR) during the cold war. Each side has the choice of two strategies: Aggressive and Restrained. The payoff table is given as follows: USSR Restrained Aggressiveness Restrained 4,3 1,4 USA Aggressiveness 3,1 2,2 a) Consider this game when the two countries move simultaneously. Find all pure strategy Nash equilibria.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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