Suppose Rashard and Alyssa are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Rashard chooses Up and Alyssa chooses Down, Rashard will receive a payoff of 6 and Alyssa will receive a payoff of 8. Rashard Up Down Up 4,6 7,5 Alyssa Down 6,8 3,7 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Rashard chooses and Alyssa chooses

Suppose Rashard and Alyssa are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Rashard chooses Up and Alyssa chooses Down, Rashard will receive a payoff of 6 and Alyssa will receive a payoff of 8. Rashard Up Down Up 4,6 7,5 Alyssa Down 6,8 3,7 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Rashard chooses and Alyssa chooses

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 17P

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7. Solving for dominant strategies and the Nash equilibrium Suppose Rajiv and Simone are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Rajiv chooses Right and Simone chooses Right, Rajiv will receive a payoff of 5 and Simone will receive a payoff of 5.
1. Consider the following simultaneous move game Player 2 C D Player 1 A 4,3 4,-2 B 2,2 3,-1 C 3,0 4,0 d) Suppose the game is now played sequentially where Player 1 chooses first, player 2 observes 1’s choice and then makes his own choice. What are the Nash equilibria of this sequential game?
on 8.1 Consider the following game: Player 1 A C D 7,6 5,8 0,0 Player 2 E 5,8 7,6 1, 1 F 0,0 1,1 4,4 a. Find the pure-strategy Nash equilibria (if any). b. Find the mixed-strategy Nash equilibrium in which each player randomizes over just the first two actions. c. Compute players' expected payoffs in the equilibria found in parts (a) and (b). d. Draw the extensive form for this game.
5 Suppose two players play one of the two normal-form games shown in Figure 1. L U 0,-1 D 2,4 R 2,0 6,0 L U | 4,-1 D 2,-2 R 2,0Now suppose that Player 2 knows which game is being played, but Player 1 does not. Find the pure strategy Bayesian Nash equilibrium of this game.