Question 192.5 pointsSave AnswerPrisoner BRemain SilentConfess (do not(cooperate withother prisoner)A gets 2 years, B | A gets 8 years, Bgets 2 yearsA gets 1 year, Bgets 8 yearscooperate withother prisoner)Remain Silent (cooperatewith other prisoner)Confess (do not cooperatewith other prisoner)gets 1 yearA gets 5 years, Bgets 5 yearsPrisoner ATwo prisoners have the option of confessing or remaining silent. The results of their choices are interdependent. Both are trying tominimize their time served in prison. These are the potential outcomes. What is the Nash Equilibrium?Confess, ConfessConfess, Remain SilentRemain Silent, Remain SilentRemain Silent, ConfessO O

Cooperate confess Cooperate 2,2 8, 1 Confess 1,8 5,5

Prisoner B Confess (do not cooperate with other prisoner) A gets 2 years, B | A gets 8 years, B gets 1 year A gets 5 years, B gets 5 years Remain Silent (cooperate with other prisoner) Remain Silent (cooperate with other prisoner) Confess (do not cooperate with other prisoner) gets 2 years A gets 1 year, B gets 8 years Prisoner A Two prisoners have the option of confessing or remaining silent. The results of their choices are interdependent. Both are trying to minimize their time served in prison. These are the potential outcomes. What is the Nash Equilibrium? Confess, Confess Confess, Remain Silent Remain Silent, Remain Silent Remain Silent, Confess O O O

Prisoner B Confess (do not cooperate with other prisoner) A gets 2 years, B | A gets 8 years, B gets 1 year A gets 5 years, B gets 5 years Remain Silent (cooperate with other prisoner) Remain Silent (cooperate with other prisoner) Confess (do not cooperate with other prisoner) gets 2 years A gets 1 year, B gets 8 years Prisoner A Two prisoners have the option of confessing or remaining silent. The results of their choices are interdependent. Both are trying to minimize their time served in prison. These are the potential outcomes. What is the Nash Equilibrium? Confess, Confess Confess, Remain Silent Remain Silent, Remain Silent Remain Silent, Confess O O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Two neighborhood kids can play at home or walk to a nearby park. Playing with their toys yields some happiness. However, they would enjoy playing with the other kid at the park even more at the park. But each has a concern that if they go the park the other will not show up. This is an interesting game or situation because neither kid has an incentive to betray the other and not show up, but each kid fears walking to the park and having no one to play with. They also have to fear that if the other kid thinks they won't show up, that other kid will won't show up. All this strategic thinking is a lot for kids to take in. Here is the payoff matrix: Kid 1 Toys at Home Park Toys at Home Kid 2 Park How many Nash equilbria are there? 1,2,3 or 4 There is an option to let Kid 1 move first, but no option for Kid 2 to move first. Should Kid 2 let Kid 1 move first. Yes or No Blank # 1 Blank # 2
Two travelers own an identical suitcase that contains identical antiques. The airline is liable for a maximum of $100 per suitcase. To determine how much to reimburse each traveler, the airline puts them in different rooms (so that they cannot communicate), and ask them to write down an amount (an integer number) between $2 and $100. If both write down the same number, the airline will reimburse both travelers that amount. However, if the two amounts are different, both travelers will be paid the lowest of the two numbers along with a bonus/malus: $2 extra will be paid to the traveler who wrote down the lower value and a $2 deduction will be taken from the person who wrote down the higher amount. What are the travelers’ best response functions? What are the Nash equilbria of the game? Are they Pareto efficient? Explain the intuition why.
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Consider that there is one auctioneer who would like to sell one commodity and there are 2 individuals, 1 and 2. The auctioneer will apply the following tie-breaking rule: If there are multiple bidders who announce the highest bid, then select the bidder with the smallest index will be picked up as the winner. (For instance, let b(i) = b(j) . Then, i is the winner if and only if i < j.) Let each individual i's private value of the commodity, v(i), is given as: v(1) = $1600; v(2) = $2100. Considering a first-price auction, specify the set of Nash equilibria in this game.
To achieve Pareto optimum in a Prisoner's Dilemma, we assume that the players confess pick the best individual payoff I choose to use one of my three skips on this question. work together
An auditor and a taxpayer play the following strategic game. The auditor must choose whether to Audit (A) the taxpayer or not (N). The taxpayer independently decides whether to be Honest (H) in reporting her income or to Cheat (C). Since auditing is costly, the auditor prefers not to audit the taxpayer if she reports honestly, but prefers to audit if the axpayer cheats. If the taxpayer is caught cheating (i.e. if she cheats and is audited), then she receives a severe punishment. If she is not caught, she prefers cheating to being honest. Suppose that payoffs are as in the following matrix: Auditor Taxpayer C 4, -10 0,4 H A 2,0 N 4,0 (a) Find all (mixed strategy) Nash equilibria of this game. Solution: There is no NE in pure strategies. Moreover, since each pure strategy has a unique best response, there is no NE in which either player plays a pure strategy. If the Auditor chooses A with probability p and the Taxpayer chooses H with probability q, then the condition for the Auditor to…
Problem 4: Consider an infinitely repeated game, where the base game is the following 2-person 2x2 game: A A 0,0 10, 10 S1: choose A always S2: choose B always B 10, 10 0,0 Assume both players discount the future at the same rate of r, 0 < r < 1. Limiting each player's strategies to the following six possibilities, S3: Choose A then mimic the other player's previous choice S4: Choose B, then mimic the other player's previous choice S5: Choose A, then choose the opposite of the other player's previous choice S6: Choose B, then choose the opposite of the other player's previous choice a. present the strategic form of this game, b. identify all pure-strategy Nash equilibria c. does repetition with these strategies "solve" the coordination dilemma that confronts the players in the single play of the above game.
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