In the game below, there are two equilibriums: both players play conserve or bothplayers play plunder. If the game is repeated multiple times, players can maintainequilibrium in which conserve is played if:Player 2Player 1ConservePlunderSelect one:a.Conserve100, 10050,-100Plunder-100, 500,0Game is repeated many times and discount rates are highO b.Game is repeated few times and discount rates are lowO c. Game is repeated few times and discount rates are highO d. Game is repeated many times and discount rates are low

The pay-off matrix for both players are provided below Player 2ConservePlunderPlayer 1Conserve 100,…

In the game below, there are two equilibriums: both players play conserve or both players play plunder. If the game is repeated multiple times, players can maintain equilibrium in which conserve is played if: Player 2 Player 1 Conserve Plunder Conserve Plunder 100, 100 -100, 50 50,-100 0,0 Select one: O a. Game is repeated many times and discount rates are high O b. Game is repeated few times and discount rates are low C. Game is repeated few times and discount rates are high O d. Game is repeated many times and discount rates are low

In the game below, there are two equilibriums: both players play conserve or both players play plunder. If the game is repeated multiple times, players can maintain equilibrium in which conserve is played if: Player 2 Player 1 Conserve Plunder Conserve Plunder 100, 100 -100, 50 50,-100 0,0 Select one: O a. Game is repeated many times and discount rates are high O b. Game is repeated few times and discount rates are low C. Game is repeated few times and discount rates are high O d. Game is repeated many times and discount rates are low

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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B's profit B invests B does not invest 100 80 100 -40 -40 10 80 10 Which of the following statements are correct? Select one or more: O a. If A invests, B's best strategy is to not invest since A will take all the profit O b. Whoever invests first gains a first-mover advantage O c. The co-ordination game exhibits two Nash equilibria. O d. If B chooses to not invest, A's best strategy is also to not invest. A's profit A does not invest A invests
5. Instead of choosing Game A or Game B in the first stage, player 1 chooses either game B or directly which action to play in game A. Game U D L (10,5) (5,10) R (0,0) (0,0) :Game B: L R U (6,6) (0,0) D (0,0) (0,0) (a) Write the game in extensive form. (b) Solve for all SPNEs of the modified game. (c) Do all the SPNEs give intuitively reasonable predictions? Why or why not? (Hint: think about what the modification of the payoff to game A entail for player 2 in that game and how the predictions contrast with the case where the game is chosen first, then the action.)
6. There are two players. The strategy of player 1 is x, the strategy of player 2 is y. The payoffs are U (x, y) = 2xy – x² and U2(x, y) = 12y + xy – y². What is the NE?
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Question 5 Consider following extensive form game Keep Prices (8,2) Advertise Lower Prices (4,6) O Advertise; Lower Prices Firm 1 O Advertise; Keep Prices Firm 2 O Not Advertise; Keep Prices Not Advertise The subgame perfect Nash-equilibrium is O Not Advertise; Lower Prices Keep Prices (6,10) O Lower Prices (3,7) 5 pts
Which of the following is FLASE for an extensive form game with perfect information? A. All Nash equilibria has the property of non-credible threat B. Subgame perfect equilibrium eliminates non-credible threats O C. In a Nash equlibrium strategy, each agent's strategy is a contingent plan
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12. What is the subgame-perfect outcome from a finitely repeated game? a. Iterated Elimination Outcome played in each stage b. Backwards Induction Outcome played in each stage Nash Equilibrium played in each stage d. Nash Equilibrium in stage 1 only