Explain whether the statement is true or false and explain why? Statement 1: If a game has a Pareto efficient outcome, there exists a Nash equilibrium that leads to this outcome. Statement 2: If someone has linear indifference curves between contingent commodity bundles, the she must be risk averse and the risk premium is positive. Statement 3: Suppose we have a game with three pure strategies. In a (fully) mixed strategy Nash equilibrium, a player is indifferent between her three pure strategies

Explain whether the statement is true or false and explain why? Statement 1: If a game has a Pareto efficient outcome, there exists a Nash equilibrium that leads to this outcome. Statement 2: If someone has linear indifference curves between contingent commodity bundles, the she must be risk averse and the risk premium is positive. Statement 3: Suppose we have a game with three pure strategies. In a (fully) mixed strategy Nash equilibrium, a player is indifferent between her three pure strategies

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

Consider a two-player game in which the players take turns, with player 1 moving first. When it is a player's turn, she must announce a number between 1 and 3. The announced number is added to the previously announced numbers. The player who announces the number such that the sum of all announced numbers is 6 wins (receives 1) and the other loses (receives 0). Please indicate whether or not each of the following sequences of announcements is a Nash equilibrium of the game. Hint: Think about how one verifies whether or not a pair of strategies is a Nash equilibrium. P1 says 3, then P2 says 2, then P1 says 1 P1 says 1, then P2 says 3, then P1 says 2 P1 says 2, then P2 says 3, then P1 says 1 P1 says 3, then P2 says 1, then P1 says 2
Refer to Table Left-Right-ZigZag. How many pure strategy Nash equilibria does this game have? Table: Left-Right-ZigZag Player 1 Drive left Driver right Zigzag 1) 1 2) 2 3) 3 4) 4 5) None of the above. Drive left (1,1) (-1,-1) (0,0) Player 2 Driver right (-1,-1) (1,1) (0,0) Zigzag (0,0) (0,0) (0,0)
Mr. and Mrs. Ward typically vote oppositely in elections and so their votes "cancel each other out." They each gain 24 units of utility from a vote for their positions (and lose 24 units of utility from a vote against their positions). However, the bother of actually voting costs each 12 units of utility. The following matrix summarizes the strategies for both Mr. Ward and Mrs. Ward. Mr. Ward Vote Vote Mrs. Ward Mr. Ward: -12, Mrs. Ward: -12 Don't Vote Mr. Ward: -24, Mrs. Ward: 12 The Nash equilibrium for this game is for Mr. Ward to payoff of Don't Vote Mr. Ward: 12, Mrs. Ward: -24 Mr. Ward: 0, Mrs. Ward: 0 units of utility and Mrs. Ward receives a payoff of and for Mrs. Ward to units of utility. Under this outcome, Mr. Ward receives a
Please please give answer complete
Suppose that, in an ultimatum game, the proposer may not propose less than $1 nor fractional amounts, and therefore must propose $1, $2, …, or $10 (see image attached below). The responder must Accept (A) or Reject (R). Suppose, first, that this game is played by two egoists, for whom u(x,y)=x. Find all subgame-perfect equilibria in this game. Suppose, second, that this game is played by two altruists, for whom u(x,y) = ⅔(x)1/2 + ⅓(y)1/2. Find all subgame-perfect equilibria in this game.
Two firms are competing on price. If they have the same price, they share the market - otherwise the one with the lowest price captures all demand Market demand follows Q(P)=100-3P Cost is C(Q)=10Q Firms can only choose between the following prices: 9, 10, 11, 12. In the Nash equilibrium of this game, what prices are charged? Suggestion: calculate the profits they obtain for each of the price combinations, write down the game in its normal form (payoff matrix), and then use the underlining method to match best responses. 12 11 9 10
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.
1.a) If the three executives of a fraudulent organization report nothing to the authorities, each gets a payoff of 100. If at least one of them blows the whistle, then those who reported the fraud get 28, while those who didn’t get -100. Suppose they play a symmetric mixed-strategy Nash equilibrium where each is silent (does not report fraud) with probability p. What is p?A, 0.1B, 0.28C, 0.5D, 0.8 b) In a two-player game, with strategies and (some known and some unknown) payoffs as shown below, suppose a mixed-strategy equilibrium exists where 1 plays C with probability 3/4, and Player 2 randomizes over X, Y, and Z with equal probabilities. What are the pure-strategy equilibria of this game? A, (A, Y) and (B, X)B, (A, Z) and (C, Y)C, (B, X) and (C, X)D, (C, X) and (C, Y)
Consider the payoff matrix for a game depicted below. Player 1 selects the row and Player 2 selects the column. Up Down Left 1, -1 -1, 1 Right -1, 1 1, -1 What is (are) the Nash equilibrium (equilibria)? Question 18Answer a. Player 1 plays right; Player 2 plays down b. Player 1 plays left; Player 2 plays down c. Player 1 plays down; Player 2 plays left d. Player 1 plays right; Player 2 plays up e. Player 1 plays up; Player 2 plays left f. There is no Nash equilibrium g. Player 1 plays down; Player 2 plays right h. Player 1 plays up; Player 2 plays right i. Player 1 plays left; Player 2 plays up