Brett and Oliver are both going surfing. Each can choose between "North Beach" (N) and "South Beach" (S). North beach is better, but they both also prefer havingthe beach to themselves rather than sharing it with the other person. If Brett chooses N and Oliver N, the payoffs are (60, 60). If Brett chooses N and Oliver ChoosesS, the payoffs are (70,30). If Brett chooses S and Oliver N the payoffs are (30,70). If they both choose S the payoffs are (20,20). Brett gets to choose first and tellsOliver, who then makes a decision. Which of the following is true?O The number of nash equillibrium in this game is less than the number of subgame perfect equillibriumO The number of nash equillibrium in this game is the same as the number of subgame perfect equillibriumO The number of nash equillibrium in this game is more than the number of subgame perfect equillibriumO There is no subgame perfect equilibrium in this game

Sub game perfect equilibrium is a type of dynamic game , in which one player starts and other one…

Answered: Brett and Oliver are both going…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.7P

See similar textbooks

Similar questions

Alice chooses action a or action b, and her choice is observed by Bob. If Alice chooses action a, then Alice receives a payoff of 5 and Bob receives a payoff of 7. If Alice chooses action b, then Bob chooses action cor action d. If Bob chooses action c, then Alice receives a payoff of 10 and Bob receives a payoff of 5. If Bob chooses action d, then Alice receives a payoff of 0 and Bob receives a payoff of 3. Which of the following are correct statements about the game described in the previous paragraph? (Mark all that are correct.) O This game has imperfect information. O Alice's backward induction payoff is 5. O This is a promise game. O Alice's backward induction payoff is 0. O This is a prisoners' dilemma. O Bob's backward induction payoff is 5. O Bob's backward induction payoff is 3. O This is a threat game.
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…
CLASSES OF GAMES First, Alice chooses either action al or action a2. If Alice chooses action al, then she receives a payoff of 2 and Bob receives a payoff of 8. If Alice chooses action a2, then Bob chooses either action b1 or action b2. If Bob chooses action b1, then Alice receives a payoff of 0 and Bob receives a payoff of 2. If Bob chooses action b2, then Alice receives a payoff of 4 and Bob receives a payoff of 4. Which of the following are correct statements about the game described in the previous paragraph? (Mark all that are correct.) This game has perfect information. The strategy profile (a2,b1) is a Nash equilibrium of this game. Bob's backward induction payoff is 8. The strategy profile (al,b1) is a Nash equilibrium of this game. The strategy profile (a1,b2) is a Nash equilibrium of this game. The strategy profile (a2,b2) is a Nash equilibrium of this game. This is a bargaining game. This is a promise game. This is a threat game. Alice's backward induction payoff is 2.
Alice and Julia want to spend time together but have different preferences for their activities. They can choose between two options: going to a soccer game or watching a football game. Alice prefers football and Julia prefers the football game, but they both prefer being together over being apart. If they both choose to attend a soccer game then Julia receives a payoff of 2 and Alice a payoff of 1. If they both choose to attend a football game, then Julia receive a payoff of 1 and Alice a payoff of 2. If one chooses a football game and the other a soccer game then they both receive a payoff of O. The payout matrix below illustrates these payoffs. Which of the following statements are true: I. There is a dominant strategy II. A nash equilibrium exists where Alice attends a football game and Julia attends a soccer game III. A nash equilibrium exists where both friends attend a soccer game IV. Both attending a football game is a stable outcome. Alice Soccer Football Julia Soccer Football…
Consider the below payoff matrix for a game of chicken. Two players drive their cars down the center of the road directly at each other. Each player chooses SWERVE or STAY. Staying wins you more payoff only if the other player swerves. Swerving loses face if the other player stays. However, the worst outcome is when both players stay. Stay Swerve Stay -0,-0 -6,6 Swerve 6,-6 9,9 Player 1 chooses rows and Player 2 chooses columns. Denote the probability of "Stay" for Player 1 as p and for Player 2 as 9. What is the value of p so that Player 2 is indifferent between Stay and Swerve? Write your answer as a decimal number with 2 decimal places (e.g. 0.05)
$11. Anne and Bruce would like to rent a movie, but they can't decide what kind of movie to get: Anne wants to rent a comedy, and Bruce wants to watch a drama. They decide to choose randomly by playing "Evens or Odds." On the count of three, each of them shows one or two fingers. If the sum is even, Anne wins and they rent the comedy; if the sum is odd, Bruce wins and they rent the drama. Each of them earns a payoff of 1 for winning and 0 for losing "Evens or Odds." (a) Draw the game table for "Evens or Odds." (b) Demonstrate that this game has no Nash equilibrium in pure strategies.
David wants to auction a painting, and there are two potential buyers. The value for eachbuyer is either 0 or 10, each value equally likely. Suppose he offers to sell the object for $6, and the two buyers simultaneously accept or reject. If exactly one buyer accepts, the object sold to that person for $6. If both accept, the object is allocated randomly to the buyers, also for $6. If neither accepts, the object is allocated randomly to the bidders for $0. (a) Identify the type space and strategy space for each buyer. (b) Show that there is an equilibrium in which buyers with value 10 always accept. (c) Show that there is an equilibrium in which buyers with value 10 always reject.
Consider the following two-player game.First, player 1 selects a number x≥0. Player 2 observes x. Then, simultaneously andindependently, player 1 selects a number y1 and player 2 selects a number y2, at which pointthe game ends.Player 1’s payoff is: u1(x; y1) = −3y21 + 6y1y2 −13x2 + 8xPlayer 2’s payoff is: u2(y2) = 6y1y2 −6y22 + 12xy2Draw the game tree of this game and identify its Subgame Perfect Nash Equilibrium.
Two workers are on a production line. They each have two actions: exert effort, E, or shirk, S. Effort costs a worker e > 0 and shirking costs them nothing. If two workers do action E a lot of output is produced and the workers earn £3 each. If only one worker chooses action E less output is produced and they both earn £1. The workers earn nothing if they both shirk. (i) Describe this situation as a strategic form game (assuming the workers do not observe each other's effort choice when making their own decision). (ii) For what values of e does this game have strictly dominant strategies? (iii) Describe the Nash equilibria of this game for e = 0,1, 2, 3. (iv) The workers now are re-arranged into a production line. First worker 1 moves and then worker 2 moves. Worker 2 can now see worker l's effort level before they choose their effort. Draw this extensive form game. (v) Find the subgame perfect equilibria of the production-line game for c = 1/2 and c = 3/2.
Tom and Jerry are each given one of two cards. One card is blank, while the other has a circle on it. A player can draw a circle on the blank card or erase the circle on one that has already been drawn. Tom and Jerry make their decision separately and hand in the card at the same time.Nobody wins anything unless the two cards are handed in with one and only one circle on them. The player who hands in the card with the circle receives $20, while the one who hands in the blank card receives $10. Answer the following questions. (1) Represent the game in strategic form.(2) Find the Nash equilibria of the game (in pure strategies).
In a gambling game, Player A and Player B both have a $1 and a $5 bill. Each player selects one of the bills without the other player knowing the bill selected. Simultaneously they both reveal the bills selected. If the bills do not match, Player A wins Player B's bill. If the bills match, Player B wins Player A's bill. a. Develop the game theory table for this game. The values should be expressed as the gains (or losses) for Player A. b. Is there a pure strategy? Why or why not? Determine the optimal strategies and the value of this game. Does the game favor one player over the other? d. Suppose Player B decides to deviate from the optimal strategy and begins playing each bill 50% of the time. What should Player A do to improve Player A’s winnings? Comment on why it is important to follow an optimal game theory strategy. с.
John and Paul are walking in the woods one day when suddenly an angry bear emerges from the underbrush. They each can do one of two things: run away or stand and fight. If one of them runs away and the other fights, then the one who ran will get away unharmed (payoff of 0) while the one who fights will be killed (payoff -100). If they both run, then the bear will chase down one of them and eat them to death but the other one will get away unharmed. Assuming they don't know which one will escape we will call this a payoff of -50 for both. If they BOTH fight, then they will successfully drive off the bear but they may be injured in the process (payoff -10). Construct a payoff matrix for this game and identify the pure strategy Nash equilibrium. (Indicate it with words not with a circle!)

SEE MORE QUESTIONS

Recommended textbooks for you

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics: Applications, Strategies an…

Economics

ISBN:

9781305506381

Author:

James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:

Cengage Learning

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics: Applications, Strategies an…

Economics

ISBN:

9781305506381

Author:

James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS