X 8.7 Return to the game with two neighbors in Problem 8.5. Continue to suppose that player i's average benefit per hour ofwork on landscaping is 10-, +2 Continue to suppose that player 2's opportunity cost of an hour of landscaping work is 4.Suppose that player I's opportunity cost is either 3 or 5 with equal probability and that this cost is player 1's privateinformation. a. Solve for the Bayesian-Nash equilibrium. b. Indicate the Bayesian-Nash equilibrium on a best-responsefunction diagram. c. Which type of player 1 would like to send a truthful signal to player 2 if it could? Which type would like tohide his or her private information?

Answered: Image /qna-images/answer/3e67a2ff-4bee-47c8-bdcd-4a756e02a226.jpg

Answered: X 8.7 Return to the game with two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Table 9-03. Suppose you are a general in the army. Your country is at war. You are trying to invade the enemy. You can attack on the enemys east coast or the west coast. The enemy has only enough troops to defend one coast. The payoff matrix below represents whether you or the enemy wins (represented by 1) or loses (represented by 0). Enemy Defend east coast Defend west coast Enemy: 1 Enemy: 0 Attack east coast You: 0 You: 1 You Enemy: 0 Enemy: 1 Attack west coast You: 1 You: 0 Refer to Table 9-03. To win the war, O a. you must attack the west coast, only if you have credible information that the enemy is defending the east coast. O b. you must attack the west coast, and information about whether the enemy is defending the east or the west coast is irrelevant to you. c. you must attack the west coast, only if you have credible information that the enemy is defending the west coast. d. you must never attack the west coast, and information about whether the enemy is defending the east or…
10. Here's another game that has interested researchers, especially those of the type who work in the Max Gluskin House on campus at UofT. It's also a two-player game, but this time the payment is integral to describing the game. There is no direct Researcher involvement in the game, other than potentially as the source of a payout. For the sake of describing the game, imagine that Anson and Kanav are our two players and that they are playing the game virtually via Zoom for bitcoins, denoted B. There are always two piles of bitcoin in play: a larger one and a smaller one. Ahead of the game Anson and Kanav decide the maximum number 2n of turns, for some n E N greater than or equal to 1. • During the first turn the large pile of bitcoin has 4 Band the smaller pile of bitcoin has 1 B. Anson can either take the bitcoin or pass. If Anson (4 B) takes the bitcoin he gets the larger pile, Kanav gets the smaller pile (1 B) and the game ends. If he passes, the size of each pile is doubled. • Now…
Consider the following two-player game with three options for each player. (Payouts are listed for the row player first, then the column player.) player Y layery 3,3 A 1,5 4,4 6,2 K 8,1 3,7 5,2 0,6 1,1 Find a mixed Nash equilibrium for this game. Solution suggestion: Use two variables per player. If p and are the probabilities of selecting the first two strategies, then 1-p-q is the probability of selecting the third strategy. You will need to solve a system of equations.
Question 2. Two students are working together to submit their Microeconomics mid-semester group coursework. Each student i can put in the effort x; that costs c(x;), in which x; E [0, 1]. This gives each student the utility of u(x1, x2). Formu- late this situation as a strategic game.
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Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for thecar is 12 ($12,000). Bo, the dealer, is willing to sell the car as long as he receives at least 9($9,000). What is the Nash bargaining solution to this game?
Use this information for questions 19-22. Consider the Acid Rain Game with new payoffs below. Total net benefits are given in the payoff matrix below. Country B $96 O $108 $90 Low $120 Abatement High Abatement Country A Low Abatement A: $20 B: $10 A: $21 B: $7 Imagine Country B discounts future profits at d=0.9. If you know that Country A will use the grim reaper punishment, what is the present value of net benefits from deviating for Country B? High Abatement A: $14 B: $18 A: $22 B: $12
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
2. Consider the following two-player game with two players: Adam and Eve. Adam A1 A2 A3 A4 E1 6,3 5, 3 5, 0 2,0 E2 4,4 5, 4 3, 2 2, 3 Eve E3 4, 1 0,2 6, 1 3, 4 E4 3,0 5, 1 4,0 6₂ 1 a. Find the Iterated Elimination of Dominant Strategies Equilibrium for this game. Explain.
7

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