Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 8CACQ
a)
To determine
The Nash-equilibrium when the decisions are made independently, simultaneously, and without any communication and the outcome that is considered most likely.
b)
To determine
The outcome that will occur when player 1 utters 1 syllable before the players take decision simultaneously and independently.
c)
To determine
The expected outcome when player 2 is permitted to choose the strategy before player 1
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Students have asked these similar questions
Question 1
Consider the following game. Player 1 has 3 actions (Top, middle,Bottom) and player 2 has three actions (Left, Middle, Right). Each player chooses their action simultaneously. The game is played only once. The first element of the payoff vector is player 1’s payoff. Note that one of the payoffs to player 2 has been omitted (denoted by x).
A) Suppose that the value of x is such that player 2 has a strictly dominant strategy. Find the solution to the game. What solution concept did you use to solve the game?
B) Suppose that the value of x is such the player 2 does NOT have a strictly dominant strategy. Find the solution to the game. What solution concept did you use to solve the game?
Consider the following two-player game. First, Player 1 chooses x. Then, after
observing Player 1's choice, Player 2 chooses y.
The players' utility functions are as follows:
_
U₁(x, y) = (3 — 4x — 4y)x — 2x
-
-
U2(x, y) = (34x — 4y)y — 3y
Find the subgame perfect equilibrium of the game.
Problem #4: Bayesian Nash Equilibrium
Consider the following game, which has two states of nature shown in the two game tables
below:
"Harmful" (p = 1/3)
"Helpful" (1-p = 2/3)
Player 2
X Y
3, 2
Player 2
Y
2, 3
3, 2
1,0
0,1
A
0,1
3,2
A
Player 1
Player 1
В
0,1
B
a) Assume that Player 1 knows what the true state of nature is when playing this game, but
Player 2 does not. Find all of the game's Bayesian Nash equilibria. (Hint: It may help to
arrange the game tables appropriately.)
b) Now, assume that Player 2 knows the true state of nature, but Player 1 does not. Find all
of the game's Bayesian Nash equilibria.
Chapter 10 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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