What is the equilibrium to Game 2? Group of answer choices: US punishes with sanctions, Iran retaliates US punishes with sanctions, Iran backs down US proposes compromise, Iran accepts US proposes compromise, Iran accelerates nuclear effort, US backs down US proposes compromise, Iran accelerates nuclear effort, US conducts an air strike 2. In Game 2, what is the highest value of X the US would ever consider offering? Why?

What is the equilibrium to Game 2? Group of answer choices: US punishes with sanctions, Iran retaliates US punishes with sanctions, Iran backs down US proposes compromise, Iran accepts US proposes compromise, Iran accelerates nuclear effort, US backs down US proposes compromise, Iran accelerates nuclear effort, US conducts an air strike 2. In Game 2, what is the highest value of X the US would ever consider offering? Why?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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Consider the following coordination game: Player 2P1 Comedy Show Concert Comedy Show 11,5 0,0 Concert 0,0 2,2 a. Find the Nash equilibrium(s) for this game.b. Now assume Player 1 and Player 2 have distributional preferences. Specifically, both people greatly care about the utility of the other person. In fact, they place equal weight on their outcome and the other person’soutcome, ρ = σ = ½. Find the Nash equilibrium(s) with these utilitarianpreferences.c. Now consider the case where Player1 and Player2 do not like each other. Specifically, any positive outcome for the other person is viewed as anegative outcome for the individual, ρ = σ = -1. Find the Nashequilibrium(s) with these envious preferences.
Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming year. Assume that Alabama is currently spending $15 million on their recruiting andfacilities, and Clemson is spending $10 million. Each team has an additional $5 million to spendor keep as profits. If they both choose to not spend the additional $5 million then Alabama hasa 60% chance of getting the highest quality quarterback recruit to commit to them (getting thecommitment of the player is the goal). However, if they both choose to spend the additional $5million then there is a 57% chance that Alabama gets the high quality quarterback to commit. IfAlabama spends the additional $5 million but Clemson doesn’t then there is a 67% chanceAlabama gets the recruit. However, if Alabama does NOT spend the additional $5million butClemson does then there is a 50% change either team gets the recruit’s commitment. Setup thepayoff matrix and label the players, their strategies, and their payoffs, and…
Suppose, unfortunately, your mathematics andeconomics professors have decided to give teststwo days from now and you can spend a total ofonly twelve hours studying for both exams. Aftersome thought, you conclude that dividing yourstudy time equally between each subject will giveyou an expected grade of C in each course. Foreach additional three hours of study time for oneof the subjects, your grade will increase one letterfor that subject, and your grade will fall oneletter for the other subject.48 PART 1 • Introduction to EconomicsCopyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.a.…
Consider the following two-player game.First, player 1 selects a number x≥0. Player 2 observes x. Then, simultaneously andindependently, player 1 selects a number y1 and player 2 selects a number y2, at which pointthe game ends.Player 1’s payoff is: u1(x; y1) = −3y21 + 6y1y2 −13x2 + 8xPlayer 2’s payoff is: u2(y2) = 6y1y2 −6y22 + 12xy2Draw the game tree of this game and identify its Subgame Perfect Nash Equilibrium.
64. (This problem assumes knowledge of the basic rulesof baseball.) George Lindsey (1959) looked at boxscores of more than 1000 baseball games and foundthe expected number of runs scored in an inning foreach on-base and out situation to be as listed in the fileP09_64.xlsx. For example, if a team has a man on firstbase with one out, it scores 0.5 run on average untilthe end of the inning. You can assume throughout thisproblem that the team batting wants to maximize theexpected number of runs scored in the inning.a. Use this data to explain why, in most cases,bunting with a man on first base and no outs isa bad decision. In what situation might buntingwith a man on first base and no outs be a gooddecision?b. Assume there is a man on first base with one out.What probability of stealing second makes an attempted steal a good idea?
Consider a town with a single street of 1 km long with 3,000 people spread uniformly along it. Two stores, 1 and 2, are located at the opposite ends of the street and sell the same product (store 1 is locatedattheleftend).Thecostofwalkingist1 =$6perkmtostore1andt2 =$9perkmtostore2for each consumer. The net utility of a consumer located at point x from buying a product at store 1 is U1(x) = 100 – p1 – t1x, where pi is a price of the product at store i = 1,2. The net utility from buying at store 2 is U2(x) = 100 – p2 – t2(1 – x). The average cost of the product for each store is c = 4. (a) Assume that all consumers buy product from the sellers. Find the demand functions Di(p1,p2) and the profit functions πi(p1,p2) for each store i = 1,2 as functions of prices p1,p2.(b) Find the equilibrium prices.
Theo and Addy are deciding what toys to pick out at the toy store. Depending on what toys they pick, they can play different games together, but they can’t coordinate their choices. They can’t talk to one another at all until after that make their choice. Below is their payout matrix which shows their utility for each choice. All the bold figures are for Theo and all the non bold figures are for Addy. Addy Strategies Theo Strategies Toy Gas Pump Jump Rope Toy food 20 10 10 3 Ball 7 3 9 4 a) If Theo chooses Toy Food, what would be the possible outcomes for Addy? What would be best for Addy? b) If Addy chose a Toy Gas Pump, what are the possible outcomes for Theo? What would be best for Theo? c) Does Addy have a dominant strategy? If yes, what is her strategy? If not how can you tell? d) Does Theo have a dominant strategy? If yes, what is her strategy? If not how…
Consider a setting in which player 1 moves first by choosing among threeactions: a, b, and c. After observing the choice of player 1, player 2 choosesamong two actions: x and y. Consider the following three variants as towhat player 3 can do and what she knows when she moves:a. If player 1 chose a, then player 3 selects among two actions: high andlow. Player 3 knows player 2’s choice when she moves. Write down theextensive form of this setting. (You can ignore payoffs.)b. If player 1 chose a, then player 3 selects among two actions: high andlow. Player 3 does not know player 2’s choice when she moves. Writedown the extensive form of this setting. (You can ignore payoffs.)c. If player 1 chose either a or b, then player 3 selects among two actions: high and low. Player 3 observes the choice of player 2, but not that of player 1. Write down the extensive form of this setting.(You can ignore payoffs.)
Explain what is meant by the last-mover’s advantage.
Consider the payoff matrix for a game depicted below. Player 1 selects the row and Player 2 selects the column. Up Down Left 1, -1 -1, 1 Right -1, 1 1, -1 What is (are) the Nash equilibrium (equilibria)? Question 18Answer a. Player 1 plays right; Player 2 plays down b. Player 1 plays left; Player 2 plays down c. Player 1 plays down; Player 2 plays left d. Player 1 plays right; Player 2 plays up e. Player 1 plays up; Player 2 plays left f. There is no Nash equilibrium g. Player 1 plays down; Player 2 plays right h. Player 1 plays up; Player 2 plays right i. Player 1 plays left; Player 2 plays up
a Suppose you are given a choice between thefollowing options:A1: Win $30 for sureA2: 80% chance of winning $45 and 20% chance ofA2: winning nothing B1: 25% chance of winning $30B2: 20% chance of winning $45Most people prefer A1 to A2 and B2 to B1. Explainwhy this behavior violates the assumption that decisionmakers maximize expected utility.b Now suppose you play the following game: You havea 75% chance of winning nothing and a 25% chance ofplaying the second stage of the game. If you reach thesecond stage, you have a choice of two options (C1 andC2), but your choice must be made now, before youreach the second stage.C1: Win $30 for sureC2: 80% chance of winning $45 13.5 Bayes’ Rule and Decision Trees 767Most people choose C1 over C2 and B2 to B1 (from part(a)). Explain why this again violates the assumption ofexpected utility maximization. Tversky and Kahneman(1981) speculate that most people are attracted to thesure $30 in the second stage, even though the secondstage may never be…
you and a friend decide to run a three mile race. If you agree to run together, you keep up with himfor the first mile, but you overexert yourself and run the last two miles at slower paces on your own. Tomake up for lost time, your friend runs the last two miles at a faster pace. Your mile times are 6:30, 7:00,and 7:30. Your friend’s times are 6:30, 6:00, and 6:00. If you both agree to run on your own, you run aconstant pace of 7:05 while your friend runs at a constant pace of 6:05. If you want to run together butyour friend wants to run solo, he runs his constant pace of 6:05. You, on the other hand, want to showhim that you can run faster, but you end up overexerting yourself after the first mile. You run times of6:20, 7:05, and 7:30. If he wants to run together but you do not, you both run at your pace of 7:05. Thissituation can be turned into an economic game, with the payoffs the overall race times. You each wantto run the fastest time you possibly can.(a) Who are the players in…