Q1. Suppose player A and player B are playing the following game. Player A can choose "Up" and "Down", while player B can choose "Left" and "Right". The payoff matrix is depicted below. Player A's payoff is the first entry. Player B's payoff is the second entry. Player A U D Run a. Suppose this is a one-shot, simultaneously-move game, find all the Nash equilibria (pure and mixed). (-25,-4) Player B L (7,5) (1, 1) Q2. Consider this sequential game. Assume the players can only use pure strategies Drive Player 1 Player 2 Walk Run R (1, 1) (4, 10) Fly Walk Swim (10,0) (3,20) (2,10) (1,9) a. Use backward induction to solve for the subgame perfect Nash equilibrium.
Q1. Suppose player A and player B are playing the following game. Player A can choose "Up" and "Down", while player B can choose "Left" and "Right". The payoff matrix is depicted below. Player A's payoff is the first entry. Player B's payoff is the second entry. Player A U D Run a. Suppose this is a one-shot, simultaneously-move game, find all the Nash equilibria (pure and mixed). (-25,-4) Player B L (7,5) (1, 1) Q2. Consider this sequential game. Assume the players can only use pure strategies Drive Player 1 Player 2 Walk Run R (1, 1) (4, 10) Fly Walk Swim (10,0) (3,20) (2,10) (1,9) a. Use backward induction to solve for the subgame perfect Nash equilibrium.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 2E
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Please help with #1
Transcribed Image Text:Q1. Suppose player A and player B are playing the following game. Player A can choose "Up" and
"Down", while player B can choose "Left" and "Right". The payoff matrix is depicted below. Player
A's payoff is the first entry. Player B's payoff is the second entry.
Player A
U
D
Player B
L
(7,5)
(1, 1)
a. Suppose this is a one-shot, simultaneously-move game, find all the Nash equilibria (pure and
mixed).
Run
Q2. Consider this sequential game. Assume the players can only use pure strategies
(-25,-4)
R
(1, 1)
(4, 10)
Player 1
Drive
Fly
FA
Player 2
Walk Run
(10,0)
(3, 20)
Walk
Swim
(2,10) (1,9)
a. Use backward induction to solve for the subgame perfect Nash equilibrium.
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