MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 10, Problem 9CACQ
a)
To determine
The dominant strategy for each player.
b)
To determine
The secure strategy for both the players.
c)
To determine
The Nash-equilibrium for the given game.
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Students have asked these similar questions
Use the following payoff matrix to answer the following questions Suppose this is a one-shot game: a. Determine the dominant strategy for each player. If such strategies do not exist, explain why not. b. Determine the secure strategy for each player. If such strategies do not exist, explain why not. c. Determine the Nash equilibrium of this game. If such an equilibrium does not exist, explain why not.
Consider the following game in normal form.
Not cooperate
Cooperate
Not cooperate
20,20
50,0
Cooperate
0,50
40,40
What is Nash equilibrium? Is it efficient? Why?
What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy.
Calculate the discount factor (δ) that would make both players decide to cooperate.
Use the following payoff matrix to answer the questions below.
Cooperate
Defect
1
Cooperate
100, 100
40, 125
Defect
125, 40
50, 50
Which player (if any) has a Dominant Strategy?
[ Select ]
What is the Nash Equilibrium of this game? [ Select ]
Does this game satisfy the definition of a prisoner's dilemma? [ Select ]
Chapter 10 Solutions
MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
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Similar questions
- Which of the following is true for a two-person game which has a Nash equilibrium? The game may or may not have a dominant-strategy equilibrium. Only one of the two players will have a dominant strategy. The game must have a dominant-strategy equilibrium. The dominant strategy of the players must be different.arrow_forwardTrue or false? If a game has a Nash equilibrium, that equilibrium will be the equilibrium that we expect to observe in the real world. False. People don’t always act in the way that a Nash equilibrium requires. People don’t always make the necessary calculations and they take into account the outcome of others. False. A Nash equilibrium is based on very strict assumptions that rarely hold in the real world. No real-world situation leads to a Nash equilibrium. True. As long as people are rational and have their own self-interest at heart, real-life games will result in the Nash equilibrium. True. Nash’s theory of equilibrium outcomes was derived from real-world interactions. The theory holds true for almost all real-world scenarios.arrow_forwardConsider a game where there is a dominant strategy equilibrium. You would then argue that, in equilibrium the following statement applies Question options: Each player gets the highest utility he can possibly get. Total surplus is not necessarily maximized. Total surplus is maximized. At least one of the player gets the highest payoff he can reach.arrow_forward
- Use the following normal-form game to answer the following questions. a. For what values of x is strategy D (strictly) dominant for player 2? b. For what values of x is strategy B (strictly) dominant for player 1? c. For what values of x is (B, D) the only Nash equilibrium of the game?arrow_forwardSuppose that you and a friend play a matching pennies game in which each of you uncovers a penny. If both pennies show heads or both show tails, you keep both. If one shows heads and the other shows tails, your friend keeps them. Show the pay- off matrix. What, if any, is the pure-strategy Nash equilibrium to this game? Is there a mixed-strategy Nash equilibrium? If so, what is it?arrow_forwardIn a game of chicken, two drivers are heading towards each other on a collision course. The first one to swerve is considered the "chicken" and loses. What is the Nash equilibrium in this game? a) Both drivers swerve b) Neither driver swerves c) One driver swerves while the other doesn't d) It depends on the specificarrow_forward
- Consider the following hypothetical case. Only BMW and a competitor, Mazda, are considering launching a new, niche HPC in the Asian market. The issue is what price to charge. Both new cars are very similar in performance and production cost. Analyse the interaction between the two firms using game theory. Present a payoff matrix to model the situation and analyse it for Nash equilibrium. What can either of these firms do to make their best, most-preferred outcome more likely?arrow_forwardHere is a payoff matrix that is interesting. I am not in an imaginative mood, so I won't try to tell a story about why the payoffs come out this way. Find all the pure-strategy Nash equilibria. Is this a game where you expect that players would end up in a Nash equilibrium? What would you expect to happen and why? Row Top Row Bottom Column Left 4, -3000 12,8 Column Right 10,6 5, 4arrow_forwardChris Evans Party Don't Party Paparazzo Stalk 3,4 1,1 Don't Stalk 4,2 1,2 Suppose a sequential game in which Paparazzo moves first. What is the subgame perfect Nash equilibrium? (Stalk; Party if Paparazzo chooses Stalk, and Party if Paparazzo chooses Don't Stalk). (Stalk; Party if Paparazzo chooses Stalk, and Don't Party if Paparazzo chooses Don't Stalk). O (Don't Stalk; Party if Paparazzo chooses Stalk, and Party if Paparazzo chooses Don't Stalk). (Don't Stalk; Party if Paparazzo chooses Stalk, and Don't Party if Paparazzo chooses Don't Stalk).arrow_forward
- Consider the following game where two players must simultaneously announce an integer number between 1 and 5. If you announce a number which is 1 lower than the opponent your payoff is 10, otherwise it is 0. Which of the following statements is true? All outcomes of the game are rationalizable. This game has no Nash equilibrium in pure strategies. This game has a unique pure strategy Nash equilibrium. A strictly dominant strategy exists for at least one player. More than one of the above. No Answerarrow_forwardIf a game has a mixed strategy Nash equilibrium then which of the following statements is true? There is at least two pure strategy Nash equilibrium. There are at least two rationalizable strategies. Players prefer any pure strategy Nash equilibrium to the mixed strategy Nash equilibrium. Players always prefer to mix when the other player mixes. None of the above.arrow_forwardGame theory can capture strategic situations where your outcome depends not only upon your own choice but also upon the choice of another. Present a coordination game of your choice where you and another player each have two choices or strategies. Explain in words the Nash Equilibrium concept, and identify the Nash equilibrium or Nash equilibria for your game. Explain why the outcomes that are not Nash equilibria are not.arrow_forward
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