Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 20, Problem 4IP

(a)

To determine

The reason for the highest bid was less than or greater than a dollar when dollar was auctioned off.

(b)

To determine

Ability of a rational player ever loses the auction once he started bidding.

(c)

To determine

The rationality to begin bidding.

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Game theory problem
Exercise 3.12. Three players, Avinash, Brian and John, play the following game. Two cards, one red and the other black, are shuffled well and put face down on the table. Brian picks the top card, looks at it without showing it to the other players GAME THEORY - Giacomo Bonanno 124 (Avinash and John) and puts it back face down. Then Brian whispers either "Black" or "Red" in Avinash's ear, making sure that John doesn't hear. Avinash then tells John either "Black" or "Red". Finally John announces either "Black" or "Red" and this exciting game ends. The payoffs are as follows: if John's final announcement matches the true color of the card Brian looked at, then Brian and Avinash give $2 each to John. In every other case John gives $2 each to Brian and Avinash. (a) Represent this situation as an extensive-form game. (b) Write the corresponding strategic form (or normal form) assuming that the players are selfish, greedy and risk neutral.
In the following 3-player game, the payoffs represent the number of years in jail. The equilibrium is ________   Group of answer choices Eric and Ned denies. Eric and Tim confess, but Ned denies. Eric confesses, Ned and Tim deny. Eric and Time deny, but Ned confesses
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