Use the following setting for questions 7-8. Players A and B play a dynamic version of matching pennies described below. The game follows in 3 stages. First, player A chooses the order of play, i.e. who makes the first move: player A or player B. This decision is public. Then this chosen (first) player chooses between heads and tails. Then the second (other) player observes that choice and also chooses whether to play heads or tails. For example, player A could choose that player A (themselves) makes the first move; then player A chooses tails; then player B observes it and also chooses tails. Since both of them choose to play tails, their payoffs are 1 and -1 as follows from the payoff matrix below. Player B

Use the following setting for questions 7-8. Players A and B play a dynamic version of matching pennies described below. The game follows in 3 stages. First, player A chooses the order of play, i.e. who makes the first move: player A or player B. This decision is public. Then this chosen (first) player chooses between heads and tails. Then the second (other) player observes that choice and also chooses whether to play heads or tails. For example, player A could choose that player A (themselves) makes the first move; then player A chooses tails; then player B observes it and also chooses tails. Since both of them choose to play tails, their payoffs are 1 and -1 as follows from the payoff matrix below. Player B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Felix and Jocelyn are arrested and charged with armed robbery. The police interview both suspects separately about their involvement in the crime. Each suspect has to make a decision. They can betray the other suspect by confessing that they both committed the crime, or they can cooperate with the other suspect by remaining silent. The table shows the sentences that Felix and Jocelyn will receive given their choices. Use the table to answer the question. What will be the dominant strategy outcome for Felix and Jocelyn? They both get 12 years. O They both get 10 years. Felix gets 5 years, and Jocelyn gets 15 years. Jocelyn gets 5 years, and Felix gets 15 years. Felix Stay silent Confess Stay silent Jocelyn gets 10 years Felix gets 10 years Jocelyn Jocelyn gets 15 years Felix gets 5 years Confess Jocelyn gets 5 years Felix gets 15 years Jocelyn gets 12 years Felix gets 12 years
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Cameron and Luke are playing a game called ”Race to 10”. Cameron goes first, and the players take turns choosing either 1 or 2. In each turn, they add the new number to a running total. The player who brings the total to exactly 10 wins the game. a) If both Cameron and Luke play optimally, who will win the game? Does the game have a first-mover advantage or a second-mover advantage? b) Suppose the game is modified to ”Race to 11” (i.e, the player who reaches 11 first wins). Who will win the game if both players play their optimal strategies? What if the game is ”Race to 12”? Does the result change? c) Consider the general version of the game called ”Race to n,” where n is a positive integer greater than 0. What are the conditions on n such that the game has a first mover advantage? What are the conditions on n such that the game has a second mover advantage?
In this version of the ultimatum game experiment, one participant is given £100, and is told to offer to split that amount with another participant. The second player can either refuse to accept the division, in which case the participant receiving the £100 has to give it back, or can accept the division, in which case, the player receiving the money splits the £100 as proposed. For the participant who has to accept or reject the offer A) The best strategy is to accept any offer which meets the social norm for fairness. B) The best strategy is to threaten to turn down any transfer of less than £100 to ensure that the person receiving the money makes a fair offer. C) There is a dominant strategy to accept any offer because gaining some money is better than gaining no money D) There is a dominant strategy to turn down any offer other than £50 because an unequal split would be unfair.
This is a 2-part question that requires the answer before in order to answer the next one. Thank you for your time.
Player 1 is an Internet service provider and Player 2 is a potential customer. They consider entering into a contract of service for a period of time. The provider decides between two levels of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the potential customer calls customer service, the Internet service provider makes the initial offer.The potential customer then decides whether to Buy or Not Buy. Let’s say that the interaction ends after the potential customer makes their decision. Please set up the extensive form according to the following outcomes: i. If the Internet service provider offers Low and the potential customer doesn’t buy, they both make off with 1. ii. If the Internet service provider offers Low and the potential customer buys, the Internet service provider makes off with 3, and the customer receives 0. iii. If the Internet service provider offers High and the potential customer doesn’t buy, the Internet service provider makes…
Game Theory Consider the entry game with incomplete information studied in class. An incumbent politician's cost of campaigning can be high or low and the entrant does not know this cost (but the incumbent does). In class, we found two pure-strategy Bayesian Nash Equilibria in this game. Assume that the probability that the cost of campaigning is high is a parameter p, 0 < p < 1. Show that when p is large enough, there is only one pure-strategy Bayesian Nash Equilibrium. What is it? What is the intuition? How large does p have to be? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Two firms are competing to establish one of two new wireless communication standards, A or B. A strategy is a choice of standard, and an outcome of this game is a choice of standard by each firm – for example, (A, B) represents the case where Firm 1 decides to develop standard A and Firm 2 develops standard B. Here, the first letter will always correspond to Firm 1’s decision, and the second letter to Firm 2’s decision. Firm 1 has the following preferences over outcomes, in order of highest to lowest preferred: it prefers (A, A) to (B, A) to (A, B) to (B, B). Firm 2 prefers (A, B) to (A, A) to (B, A) to (B, B). Suppose that firms simultaneously decide which standard to develop. What is the pure strategy Nash equilibrium? Is the answer (B,B)? If not please explian what is the answer?
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