MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 10, Problem 2CACQ
a
To determine
To find:The representation of game in normal form.
b)
To determine
To ascertain:The dominant strategy of players.
c)
To determine
To ascertain:The Nash equilibrium of game.
d)
To determine
To ascertain:Ranking of strategy pairs by aggregate payoffs.
e)
To determine
To ascertain:The outcome with the highest aggregate payoff.
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In a two-player, one-shot, simultaneous-move game, each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $400. If both players choose strategy B, each earns a payoff of $200. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $100 and player 2 earns $600. If player 1 chooses strategy B and player 2 chooses strategy A, then player 1 earns $600 and player 2 earns $100. a. Write this game in normal form. b. Find each player’s dominant strategy, if it exists. c. Find the Nash equilibrium (or equilibria) of this game. d. Rank strategy pairs by aggregate payoff (highest to lowest). e. Can the outcome with the highest aggregate payoff be sustained in equilibrium? Why or why not?
In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $500. If both players choose strategy B, each earns a payoff of $100. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $0 and player 2 earns $650. If player 1 chooses strategy B and player 2 chooses strategy A, then player 1 earns $650 and player 2 earns $0.a) Write the above game in normal form.b) Find each player’s dominant strategy, if it exists.c) Find the Nash equilibrium (or equilibria) of this game.d) Rank strategy pairs by aggregate payoff (highest to lowest).e) Can the outcome with the highest aggregate payoff be sustained in equilibrium? Why or why not?
Consider a game with two players A and B and two strategies X and Z. If both players play strategy X, A will earn $300 and B will earn $700. If both players play strategy Z, A will earn $1,000 and B will earn $600. If Player A plays strategy X and player B plays strategy Z, A will earn $200 and B will earn $300. If Player A plays strategy Z and player B plays strategy X, A will earn $500 and B will earn $400. Player B finds that:
a) strategy Z is a dominant strategy.
b) strategy X is a dominant strategy.
c) he has no dominant strategy.
d) strategy X is a dominated strategy.
e) strategy Z is a dominated strategy.
Chapter 10 Solutions
MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
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