Explain whether the statement is true or false and explain why? Statement 1: If a game has a Pareto efficient outcome, there exists a Nash equilibrium that leads to this outcome. Statement 2: If someone has linear indifference curves between contingent commodity bundles, the she must be risk averse and the risk premium is positive. Statement 3: Suppose we have a game with three pure strategies. In a (fully) mixed strategy Nash equilibrium, a player is indifferent between her three pure strategies

Explain whether the statement is true or false and explain why? Statement 1: If a game has a Pareto efficient outcome, there exists a Nash equilibrium that leads to this outcome. Statement 2: If someone has linear indifference curves between contingent commodity bundles, the she must be risk averse and the risk premium is positive. Statement 3: Suppose we have a game with three pure strategies. In a (fully) mixed strategy Nash equilibrium, a player is indifferent between her three pure strategies

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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