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 ofoutput is produced and the workers earn £3 each. If only one worker chooses action E less outputis 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 eachother'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 worker2 moves. Worker 2 can now see worker l's effort level before they choose their effort. Drawthis extensive form game.(v) Find the subgame perfect equilibria of the production-line game for c =1/2 and c = 3/2.

In the above game - There are two players - Worker 1 & 2 Strategy set of worker 1 = Strategy…

Effort costs a worker e > 0 and shirking costs them nothing. If two workers do action E a lot output is produced and the workers earn £3 each. If only one worker chooses action E less outp s 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 ead other's effort choice when making their own decision). (ii) For what values of c 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 work 2 moves. Worker 2 can now see worker l's effort level before they choose their effort. Dra

Effort costs a worker e > 0 and shirking costs them nothing. If two workers do action E a lot output is produced and the workers earn £3 each. If only one worker chooses action E less outp s 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 ead other's effort choice when making their own decision). (ii) For what values of c 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 work 2 moves. Worker 2 can now see worker l's effort level before they choose their effort. Dra

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

In the following simultaneous-move game, what is player 1's maximin strategy? Player 2 OL OR OU OD Player 1 L R U 50, 50 0, -10 D -10, 0 0,0
3.Students A and B decide whether to clean the dormitory. Regardless of whether the other party participates, the cleaning cost for each student to clean the dormitory is $ 8; and the benefit for each student from cleaning is $5 times the number of participants. (hint: if both of them clean the dormitory together, A and B benefit. If one cleans while the other does not, A and B benefit too) (a) Please use a game theory to briefly describe the above scenario, (that is to calculate the revenue for different strategies) (b) Draw the payoff matrix, find the Nash equilibrium.
1
Please try to solve it in 30 minute
fast i will 10 upvotes
Player 1 Cooperate (C) Defect (D) Cooperate (C) 3,3 8,0 Player 2 Defect (D) 0,8 1,1 In general, a combination of strategies is a Nash equilibrium if ... Every player is choosing a best response against the other players' strategies. Every player has a positive payoff. The players maximize the sum of their payoffs. The players choose identical strategies. If the game is repeated, which cooperative actions could benefit both players? O Both players choose C. Player 1 chooses C, Player 2 chooses D. O Player 1 chooses D, Player 2 chooses C. Both players choose D.
the Consider a simultaneous-move integer game between two players: Marilyn and Noah. Each of player is required to announce a positive integer between 1 to 4. In other words, a player can announce 1, 2, 3, or 4. Two players announce their integers simultaneously. Notice that this game is different from the games we learned in class in that each player has four actions to take. The payoffs of the players in the game are specified as follows: (1) when the two announced integers are different, whoever reports the lower number pays $1 to the other player, so that the loser of the game has payoff -1 and the winner of the game has payoff 1; (2) when the two players announce the same integer, their payoffs are both O. What is Marilyn's maximin strategy? 01 02 03 O
Player 2 A B C А 2, 2 6,1 1,1 Player 1 B 1,6 5,5 1,1 1,1 1,1 4,4 Consider the simultaneous move game represented in normal form by this payoff matrix. Suppose that the game is repeated for two periods. Which of the following outcomes could occur in some subgame perfect equilibrium (SPE) of this repeated game? Choose True if you think the outcome can be a SPE, otherwise choose False. (B, B) is played in the first period, (C, C) is played in the second period. (A, A) is played in both periods. (C, C) is played in both periods.
Game Theory de Drew Fudenberg, Jean Tirole. Exercise 2.6**
7
NE 2). Consider the following extensive form game between two players. (1,10) u D 1 B X (a) List all pure strategies of player 2. (b) Represent this game in normal form. (c) Find all pure-strategy Nash equilibria of this game. (d) Find all SPNE (in pure strategies) of this game. (6,3) (4,2) (5,1)
Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form accompanying game. Worker Work Shirk Manager Monitor -1,1 1,-1 Don't Monitor 1,-1 -1,1 Which of the following pairs of strategies constitutes a Nash equilibrium? Multiple Choice Manager monitors and worker shirks. Manager does not monitor and worker works. Manager monitors and worker works. O None of the answers is correct.