MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 10, Problem 6CACQ
a
To determine
To find: Expression of game in extensive form.
b)
To determine
To ascertain:Nash equilibrium outcome of the game.
c)
To determine
To find:Outcome which is most reasonable.
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Students have asked these similar questions
Consider a two-player, sequential-move game where each player can choose to play right or left. Player 1 moves first. Player 2 observes player 1’s actual move and then decides to move right or left. If player 1 moves right, player 1 receives $0 and player 2 receives $25. If both players move left, player 1 receives –$5 and player 2 receives $10. If player 1 moves left and player 2 moves right, player 1 receives $20 and player 2 receives $20. a. Write this game in extensive form. b. Find the Nash equilibrium outcomes to this game. c. Which of the equilibrium outcomes is most reasonable? Explain.
Consider the following two person game. Player 1 begins the game by choosing A or B. If Player 1 chooses A the game ends and Player 1 receives $100 and Player 2 receives $100. If Player 1 chooses B then Player 2 must choose C or D. If Player 2 chooses C then Player 1 receives $150 and Player 2 receives $250. If Player 2 chooses D then Player 1 receives $0 and Player 2 receives $400.
Draw the complete game tree for this situation. Be sure to accurately label the tree and include the payoffs.
Using backwards induction (look forward and reason backwards) determine the rational outcome to this game.
Given how experimental subjects have behaved in the Ultimatum game, provide a behavioral explanation for why an “average” Player 1 and 2 might deviate from the rational prediction.
Consider the following game:
Player 1 chooses A, B, or C.
If player 1 chooses A, the game ends and
each player gets a payoff of $7.
If player 1 chooses B, then player 2 observes
their choice and plays X or Y.
If player 1 chooses B and player 2 chooses X,
the game ends. Player 1 gets a payoff of $14
and player 2 gets a payoff of $16.
If player 1 chooses B and player 2 chooses Y,
the game ends. Player 1 gets a payoff of $17
and player 2 gets a payoff of $14.
If player 1 chooses Č, then player 2 chooses
secretly to put either a $5 bill or a $20 bill into
a sealed envelope. Player 1 does not observe
his choice; rather she has two options:
Open the envelope and gets whatever bill is
inside. If she chooses this, player 2 gets
nothing.
Give the envelope back to player 2, and get
$12 for sure. If she chooses this, player 2 gets
the amount in the envelope.
Draw the game tree for this game
How many strategies does Player 1 have in
this game?
Chapter 10 Solutions
MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
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