3. This game is based on the book "Real Men Don't Eat Quiche" by Bruce Feirstein. There are two players sitting at a bar. Thetiming is as follows:i. Nature determines P1's type as "wimp" or "surly". P1 observes it, P2 doesn't. (and this is common knowledge)ii. P1 chooses whether to order a beer or a quiche.iii. P2 sitting next to P1, observes P1's choice. Then P2 decides whether to start a fight with P1 or not.The extensive form is given below. Let numbers p and q denote P2's conditional beliefs in the two information sets.1,3FB2FQ2,1BW1WQW2P4,0NB9.[0.3] wimpNO0,01,0FB2,4NB[0.7] surlyFQ1,21-q2B$15Q2NO0,1 (a) Is there a pooling PBE of this game? YES or NO? (Circle one).If YES, describe one (and only one): S₁ =Use space below for your argumentation.$2(b) Is there a separating PBE of this game? YES or NO? (Circle one).If YES, describe one (and only one): S₁ =Use space below for your argumentation.$2P =9 =P

(a) Pooling Perfect Bayesian Equilibrium (PBE)Answer: YESDescription of one pooling PBE:In a pooling…

Answered: 3. This game is based on the book "Real…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a modified version of the ultimatum game, with altruism. There is a pie of size 50 to be split between Proposer (P) and Responder (R). In the first stage, P offers a share 0 ≤ x ≤ 1 of the pie to R. In the second stage, R accepts or rejects P's offer. If R accepts, the pie is split according to the proposed division, with P receiving (1 - x) x 50 and R receiving x x 50. If R rejects, both players receive none of the pie. But players' payoffs are not equal to how much of the pie they receive. In particular, payoffs in the event of an accepted offer are: Up (1x) x 50+ bx × 50 UR = x x 50+b(1-x) × 50 (Payoffs in the event of a rejected offer are 0 for both players.) Here, the parameter b > 0 measures how altruistic players are, i.e. how much "happier" a player is when his opponent receives more pie. a) Suppose b = 0.5. How much pie does P receive in the subgame perfect Nash equilibrium of the game? (specify the total amount of pie, not the share). b) Suppose b=0.5. What is P's…
6. Battle of the Networks 1\2 %share Sitcom Sitcom 48;52 Sport 42;58 Nature 55:45 58;42 Ans: s; = (0; 0.85; 0.14); V, = 55.43 s; = (0.43; 0.57;0); V½ = 44.57 40;60 63;37 60;40 Sport Nature 56:44 52;48 Find Nash Equilibrium.
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In 'the dictator' game, one player (the dictator) chooses how to divide a pot of $10 between herself and another player (the recipient). The recipient does not have an opportunity to reject the proposed distribution. As such, if the dictator only cares about how much money she makes, she should keep all $10 for herself and give the recipient nothing. However, when economists conduct experiments with the dictator game, they find that dictators often offer strictly positive amounts to the recipients. Are dictators behaving irrationally in these experiments? Whether you think they are or not, your response should try to provide an explanation for the behavior.
Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for thecar is 12 ($12,000). Bo, the dealer, is willing to sell the car as long as he receives at least 9($9,000). What is the Nash bargaining solution to this game?
Microsoft and a smaller rival often have to select from one of two competing technologies, A and B. The rival always prefers to select the same technology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. If the two companies select different technologies, Microsoft's payoff is 6 units of utility, while the small rival suffers a loss of utility of 2. If the two companies select the same technology, Microsoft suffers a loss of utility of 2 while the rival gains 2 units of utility. Using the given information, fill in the payoffs for each cell in the matrix, assuming that each company chooses its technology simultaneously. Microsoft Technology A Technology B Rival Technology A Rival: , Microsoft Rival: , Microsoft Technology B Rival: , Microsoft Rival: , Microsoft True or False: There is no equilibrium in pure strategies. True False Note:- Do not provide handwritten…
In game theory, what does the term "payoff" refer to? a) The amount of money each player has at the beginning of the game. b) The final outcome of the game. c) The utility or benefit that a player receives based on the outcome of the game. d) The number of strategies available to each player.
Part 1 Sam and Ray do not like each other and will be miserable if they attend the same event. Both are going out Friday night to either the bar or a concert; and Sam will publicly tweet where he is going before Ray makes his plans. Each will get 6 payoff from going to a concert and 2 benefit from going to the bar if the other is not there. If both go to the same venue, they will get a payoff of zero. Write a game tree for this game and find the equilibrium strategy and equilibrium payoffs clearly labeling both. Part 2 Take the game from the question above and switch the order of the decisions. Write a game tree for this game and find the equilibrium strategy and equilibrium payoffs clearly labeling both. Has the equilibrium strategies and payoffs changed from the question above? Explain why.
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The chicken game has often been used to model crises. Recall that in this game, the two players drive straight at each other. They can choose to swerve or keep going straight. If one swerves, and the other goes straight, assume that the one that swerves gets -10 utility and the one that goes straight gets 10 utility, since the one that swerves is deemed the loser. If both swerve, both get 0 utility. If both go straight, they crash and get -50 utility. Assume both players have a discount rate of 0.9 Draw the stage game of date night List all pure strategy Nash equilibria of the single stage game Consider an infinite horizon version of Chicken. Can you get an SPNE in which the both players swerve using a grim trigger type strategy? Consider the following strategies: both players swerve, as long as neither ever went straight. If one player ever plays straight, in all subsequent rounds the player that swerved goes straight and the player that went straight swerves. Can you think…
A and B are a couple and they want to go into a concert. A comes from Bonn and loves the music of Ludwig van Beethoven. B comes from Salzburg and loves the music of Wolfgang Amadeus Mozart. There are two concerts in town: one with the music of Beethoven and one with the music of Mozart. Both (A and B) prefer to go to a concert together. If both go to a concert of Beethoven, A has a pay-off of 4 and B has a pay-off of 2. If both go to a concert of Mozart, B has a pay-off of 4 and A has a pay-off of 2. If A goes to a concert of Mozart and B to a concert of Beethoven, they are both miserable and get a pay-off of 0. But, if B goes to a concert of Mozart and A to a concert of Beethoven, they are both a little better off with a pay-off of 1. Both A and B have to make a simultaneous decision and cannot communicate prior to the decision. (a) Construct the pay-off matrix for this game. (b) Identify the Nash equilibrium or equilibria of the game. (c) Which off the allocations are…
Two supermarkets face the following possibilities. Superstore Advertise Don’t Advertise Megastore Advertise $95, $80 $305, $55 Don’t Advertise $65, $285 $165, $115 47. A Nash equilibrium is Group of answer choices for Megastore to advertise and for Superstore to advertise. for Megastore to advertise and for Superstore not to advertise for Megastore not to advertise and for Superstore to advertise. for Megastore not to advertise and for Superstore not to advertise. There is no Nas equilibrium in this rivalry game.

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