Microeconomics, Student Value Edition (2nd Edition)
2nd Edition
ISBN: 9780134461786
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 13, Problem 5Q
To determine
Modelling of “prisoner’s dilemma” as a “tragedy of commons” problem.
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In game theory, what is a subgame? What is a subgame-perfect Nash equilibrium? If possible, could you please provide an example? Thank you!
In dynamic game theory, a situation where a player is using non-credible threat is an examples of subgame perfect Nash equilibrium, explain why or why not?
Can you explain what the Pure Coordination Game is and provide an example of one?
Chapter 13 Solutions
Microeconomics, Student Value Edition (2nd Edition)
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- The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called A. game theory. B. Nash equilibrium. C. the prisoners' dilemma. D. dominant strategy equilibrium.arrow_forwardhow do you describe the pure Nash equilibrium of a game, listing all equilibrium conditions.arrow_forwardSuppose two players play the prisoners' dilemma game a finite number of times, both players are rational, and the game is played with complete information, is a tit-for-tat strategy optimal in this case? Explain using your own words.arrow_forward
- Give an example of a strategic game in which at the Nash equilibrium players play lotteries. Define the game and explain the logic that leads to the equilibrium choices.arrow_forwardUsing game theory what are some examples in where Nash equilibrium is incorporated?arrow_forwardConsider the following dynamic game: Find the subgame perfect Nash Equilibrium Identify the non-credible threat equilibriumarrow_forward
- Which player (if any) has a dominate strategy? What is the Nash Equilibrium of this game? Does the game satisfy the definition of prisoner dilemma?arrow_forwardIs the solution to the prisoner’s dilemma game a Nash equilibrium? Why? The solution to the prisoner’s dilemma game is a Nash equilibrium because no player can improve his or her payoff by changing strategy unilaterally. The solution to the prisoner’s dilemma game is not a Nash equilibrium because players do not end up in the best combination for both. The solution to the prisoner’s dilemma game is not a Nash equilibrium because both players can improve their payoffs by cooperating. The solution to the prisoner’s dilemma game is a Nash equilibrium because it is a noncooperative game in which both players have to expect that the other is purely selfish.arrow_forwardWhat is the difference between a cooperative and a noncooperative game? Give an example of each.arrow_forward
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