Consider the following normal-form game: L C U ?,? 0,8 M 8,0 2,2 D 2,4 4,4 R 4,4 10, 10 6,6 ill in the first cell in the above matrix such that: a) The Nash equilibrium couple of strategies is (M, R). Explain. b) The Nash equilibrium couple of strategies is (U, L). Explain.

Consider the following normal-form game: L C U ?,? 0,8 M 8,0 2,2 D 2,4 4,4 R 4,4 10, 10 6,6 ill in the first cell in the above matrix such that: a) The Nash equilibrium couple of strategies is (M, R). Explain. b) The Nash equilibrium couple of strategies is (U, L). Explain.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Q1
Consider the following normal-form game:
L
C
U
?,?
0,8
M
8,0 2,2
D 2,4 4,4
R
4,4
10, 10
6,6
Fill in the first cell in the above matrix such that:
a) The Nash equilibrium couple of strategies is (M, R). Explain.
b) The Nash equilibrium couple of strategies is (U, L). Explain.
c) U and I are non-rationalizable strategies. Explain.
d) There exists a Nash equilibrium in dominated strategies. Explain.

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