Exercise 3. Consider the following game in normal form. L U 4, 4 1, 6 D 6, 1-3, -3 (a) Find all the Nash equilibria of this game. (b) Show that the following probability measure is a correlated equilibrium of this game. L R U c) Show that the following probability measure a correlated equilibrium of this game. L R U0 (d) Plot the payoff profile of cach equilibrium in (a)-(c) above. Are the payoff profiles in (b) and (c) inside or outside the convex hull of NE pavoffs?
Exercise 3. Consider the following game in normal form. L U 4, 4 1, 6 D 6, 1-3, -3 (a) Find all the Nash equilibria of this game. (b) Show that the following probability measure is a correlated equilibrium of this game. L R U c) Show that the following probability measure a correlated equilibrium of this game. L R U0 (d) Plot the payoff profile of cach equilibrium in (a)-(c) above. Are the payoff profiles in (b) and (c) inside or outside the convex hull of NE pavoffs?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Exercise 3. Consider the following game in normal form.
L
R
U 4, 4
1, 6
D 6, 1-3, –3
(a) Find all the Nash equilibria of this game. (b) Show that the following probability measure
is a correlated equilibrium of this game.
L R
1
1
U
(c) Show that the following probability measure is a correlated equilibrium of this game.
L R
D
(d) Plot the payoff profile of cach equilibrium in (a)-(c) above. Are the payoff profiles in (b)
and (c) inside or outside the convex hull of NE payoffs?
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