The situation is the case of 'Partially Aligned Interests: Financial Adviser and Investor' in Chapter 9. You will complete a similar analysis for the case where the adviser's report has to be the coarser choice between B or "not B." In this case, the game is represented as the following tree: Nature ● B (1/3) M (1/3) G (1/3) Bad Adviser ● Not Bad Adviser • Not Bad Adviser ● Not Bad You You You Invest Not Invest Not i Invest I Not Not Invest "Not 2,-52 0,0 2-L, -52 0,0 2.2, -1.2 0,0 13, 42 0, 0 where L is the cost of lost reputation from exaggeration. The babbling Nash Equilibrium of this game is

The situation is the case of 'Partially Aligned Interests: Financial Adviser and Investor' in Chapter 9. You will complete a similar analysis for the case where the adviser's report has to be the coarser choice between B or "not B." In this case, the game is represented as the following tree: Nature ● B (1/3) M (1/3) G (1/3) Bad Adviser ● Not Bad Adviser • Not Bad Adviser ● Not Bad You You You Invest Not Invest Not i Invest I Not Not Invest "Not 2,-52 0,0 2-L, -52 0,0 2.2, -1.2 0,0 13, 42 0, 0 where L is the cost of lost reputation from exaggeration. The babbling Nash Equilibrium of this game is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Construct the normal representation and the fully reduced normal representation of the game shown in Figure 1. 0 (0.5) (0.5) 1.r 1.s W1 X1 y1 Z1 0,0 2.t 2.t 0,4 a2 b2 a2 b2 Figure 1: Extensive-form game 2,-2 -2,2 -2, 2 2,-2
John and Jane usually vote against each other’s party in the SSC elections resulting to negating or offsetting their votes. If they vote for their party of choice, each of them gains four units of utility (and lose four units of utility from a vote against their party of choice). However, it costs each of them two units of utility for the hassle of actually voting during the SSC elections. A. Diagram a game in which John and Jane choose whether to vote or not to vote.
Within a voluntary contribution game, the Nash equilibrium level of contribution is zero, but in experiments, it is often possible to sustain positive levels of contribution for a long period. How might we best explain this? A) Participants are altruistic, and so value the payoff which other participants receive, benefiting (indirectly) from making a contribution. B) Participants believe that if they make a contribution, then other participants will be more likely to make a contribution. C) Participants in experiments believe that they have to make contributions in order to receive any payoff from their participation. D) Participants have experience of working in situations in which cooperation can be sustained for mutual benefit and so have internalised a social norm of cooperation
Note: The answer should be typed.
Topic is information economics
7
What are Nash Equilibria in the following game? Select all that apply. Pizza Jazz 7 meats Seafood Jazz Veggie 20,7 9,8 9,8 Tasty Pizza BBQ 20, 13 9, 12 18, 12 Prawn 20, 7 9,9 18, 17 (Veggie, 7 meats) (Veggie, Seafood) (Veggie, Jazz) (BBQ, 7 meats) (BBQ, Seafood) (BBQ, Jazz) (Prawn, 7 meats) (Prawn, Seafood) (Prawn, Jazz) (9,8) O (20,13) (18,7)
John and Jane usually vote against each other’s party in the SSC elections resulting to negating or offsetting their votes. If they vote for their party of choice, each of them gains four units of utility (and lose four units of utility from a vote against their party of choice). However, it costs each of them two units of utility for the hassle of actually voting during the SSC elections. A. Diagram a game in which John and Jane choose whether to vote or not to vote. B. Suppose John and Jane is in agreement not to vote during the election. 1.) Would such an agreement improve utility? Justify your answer. 2.) Would such an agreement be an equilibrium? Justify your answer.