EBK MICROECONOMICS
2nd Edition
ISBN: 8220103679701
Author: List
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 9P
(a)
To determine
Player 1’s choice in the second move.
(i) When “green, green” is played.
(ii) When “red, red” is played.
(b)
To determine
Player 2’s choice when:
(i) Player 1 played green.
(ii) Player 1 played red.
(c)
To determine
Player 1’s decision when a choice is made for the first time.
(d)
To determine
Equilibrium path in the game of picking red and green.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In the game shown below, Players 1 and 2 are competing over how to divide up $100. Each player must move at the same time without knowledge of the other player’s move. The table shows the payoff for Player1 (Player 2’s payoff is $100 Player 1’s Payoff).
Find the Nash equilibrium(s) for this game. That is, what strategy should Player 1 and Player 2 use for this game? If the Players use their optimal strategy, what will be the payoff for each player in this game?
Player 2
Player 1
Left
Middle
Right
Up
40
30
50
Middle
20
50
40
Down
30
20
30
Two players bargain over $20. Player 1 first proposes a split of(n, 20 - n), where n is an integer in {0, 1, ..., 20}. Player 2 can either accept or reject this proposal. If player accepts it, player 1 obtains $n and player 2 obtains $(20 - n). If player 2 rejects it, the money is taken away from them and both players will get $0.
Question: Find two subgame perfect Nash equilibria of this game and state clearly each player's equilibrium strategies (recall that in a dynamic game, a player's strategy is a complete-contingent plan). Explain why the strategy profiles form a subgame perfect equilibrium.
PLAYER B
LEFT RIGHT
UP 5 FOR A, 30 FOR B 10 FOR A, 12 FOR B
PLAYER A
DOWN -2 FOR A, 10 FOR B 8 FOR A, 15 FOR B
In the above game, the players are seeking to maximize the number they recieve. They choose at the same time.
What is the Nash equillibrium?
Player A will choose UP and player B will choose LEFT
Player A will UP and player B will choose RIGHT
Player A will choose DOWN and player B will choose LEFT
Player A will choose DOWN and player B will choose RIGHT
Player A will choose LEFT and player B will choose UP
Player A will choose LEFT and player B will choose DOWN
Player A will choose RIGHT and player B will choose UP
Player A will choose RIGHT and player B will choose DOWN
Knowledge Booster
Similar questions
- Consider the game shown below. In this game, players 1 and 2 must move at the same time without knowledge of the other player’s move. Player 1’s choices are shown in the row headings (A, B, C, D), Player 2’s choices are shown in the column headings (E, F, G). The first payoff is for the row player (Player1) and the second payoff is for the column player (Player 2). Player 2 Player 1 E F G A 2, 7 7, 2 2, 6 B 5, 5 5, 4 8, 4 C 4, 6 8, 4 7, 5 D 1, 6 3, 5 6, 4 Highlight the correct answer: Player 1: Has a dominant strategy to choose A Has a dominant strategy to choose B Has a dominant strategy to choose C Has a dominant strategy to choose D Does not have a dominant strategy Player 2: Has a dominant strategy to choose E Has a dominant strategy to choose F Has a dominant strategy to choose G Does not have a dominant strategy The Nash equilibrium outcome to this game is: A/F B/E B/G C/F C/G There is no pure strategy Nash…arrow_forwardConsider the game shown below. In this game, players 1 and 2 must move at the same time without knowledge of the other player’s move. Player 1’s choices are shown in the row headings (A, B, C, D), Player 2’s choices are shown in the column headings (E, F, G). The first payoff is for the row player (Player 1) and the second payoff is for the column player (Player 2). Player 2 Player 1 E F G A 2, 4 7, 7 2, 6 B 10, 6 1, 7 12, 4 C 4, 6 8, 8 7, 7 D 1, 6 3, 9 6, 7arrow_forwardConsider the game shown below. In this game, players 1 and 2 must move at the same time without knowledge of the other player’s move. Player 1’s choices are shown in the row headings (A/B), Player 2’s choices are shown in the column headings (C/D). The first payoff is for the row player (Player1) and the second payoff is for the column player (Player 2). Player 2 Player 1 C D A 8, 3 2, 4 B 7, 4 3, 5 Pick the correct answer: Player 1: Has a dominant strategy to choose A Has a dominant strategy to choose B Has a dominant strategy to choose C Has a dominant strategy to choose D Does not have a dominant strategy Player 2: Has a dominant strategy to choose A Has a dominant strategy to choose B Has a dominant strategy to choose C Has a dominant strategy to choose D Does not have a dominant strategy The Nash equilibrium outcome to this game is: A/C A/D B/C B/D There is no pure strategy Nash equilibrium for this gamearrow_forward
- Consider the game shown below. In this game, players 1 and 2 must move at the same time without knowledge of the other player’s move. Player 1’s choices are shown in the row headings (A, B, C), Player 2’s choices are shown in the column headings (D, E, F). The first payoff is for the row player (Player 1) and the second payoff is for the column player (Player 2). Player 2 Player 1 D E F A 6, 8 4, 7 2, 9 B 2, 3 2, 6 4, 7 C 5, 4 7, 5 3, 6arrow_forwardConsider the following representation of a hockey shootout. The shooter can shoot on their forehand, or deke to their backhand, and the goalie can anticipate either move. The number in each cell in the table below represents the percentage chance that the shooter scores for each pair of pure strategies. Anticipate Forehand Anticipate Backhand Shoot Forehand 20 40 Deke Backhand 40 10 In the mixed strategy Nash equilibrium of this game, what is the percentage chance that the player scores? (ie. An 80% chance should be recorded as 80)arrow_forwardConsider the following game. There are two payers, Player 1 and Player 2. Player 1 chooses a row (10, 20, or 30), and Player 2 chooses a column (10/20/30). Payoffs are in the cells of the table, with those on the left going to Player 1 and those on the right going to player 2. For example, a payoff 100/200 would mean Player 1 receives 100 and Player 2 receives 200.What is [are] the Nash Equilibrium [Equilibria] of this game?A) (10/10) and (20/20)B) (30/30)C) (10/20) and (20/10)D) (20/20)E) (30/30)arrow_forward
- Solving for dominant strategies and the Nash equilibrium Suppose Felix and Janet are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Felix chooses Right and Janet chooses Right, Felix will receive a payoff of 3 and Janet will receive a payoff of 7. Attached the table The only dominant strategy in this game is for (Janet / Felix) to choose (Left / Right). The outcome reflecting the unique Nash equilibrium in this game is as follows: Felix chooses (Left / Right) and Janet chooses (Left / Right).arrow_forwardSuppose two players play a two-period repeated game, where the stage game is the normal-form game shown below. Is there a subgame perfect Nash equilibrium in which the players select (A, X) in the first period? If so, fully describe such equilibrium. If not, explain why not. Player 1 has choice A, B; Player 2 has choice X, Y, Z. Payoff: (A,X)-(5,7), (A,Y)-(2,4), (A,Z)-(3,8), (B,X)-(1,4), (B,Y)-(3,5), (B,Z)-(1,4)arrow_forwardSuppose that Teresa and Caroline are both in the public eye. They get offers to sell secrets of the other to tabloids. If both keep the secrets, they are both better off than if they get exposed. If only one is exposed, the other person is better off than if no one was exposed. Their payoffs from each option are given in the payoff matrix. Suppose that Caroline and Teresa play the game over four television seasons, where each season is a new game. Consider the scenarios. Remember, a tit‑for‑tat strategy is one where the person starts by cooperating and then plays whatever strategy the other firm played last. Over four seasons, how much will Caroline make if she and Teresa both play tit‑for‑tat? $_______ Over four seasons, how much does Caroline make if she always exposes and Teresa plays tit‑for‑tat? $________arrow_forward
- Suppose that Teresa and Caroline are both in the public eye. They get offers to sell secrets of the other to tabloids. If both keep the secrets, they are both better off than if they get exposed. If only one is exposed, the other person is better off than if no one was exposed. Their payoffs from each option are given in the payoff matrix. Suppose that Caroline and Teresa play the game over four television seasons, where each season is a new game. Consider the scenarios. Remember, a tit‑for‑tat strategy is one where the person starts by cooperating and then plays whatever strategy the other firm played last. Over four seasons, how much will Caroline make if she plays a tit‑for‑tat strategy and Teresa always exposes? $_______ Over four seasons, how much will Caroline make if she and Teresa both always expose? $_________ Does Caroline have a dominant strategy when she and Teresa play for four seasons? No, there is no dominant strategy…arrow_forwardSuppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 6 and Deborah will receive a payoff of 5. Deborah Left Right Carlos Left 8, 4 4, 5 Right 5, 4 6, 5 The only dominant strategy in this game is for to choose . The outcome reflecting the unique Nash equilibrium in this game is as follows: Carlos chooses and Deborah chooses .arrow_forwardConsider the following game. There are two payers, Player 1 and Player 2. Player 1 chooses a row (10, 20, or 30), and Player 2 chooses a column (10/20/30). Payoffs are in the cells of the table, with those on the left going to Player 1 and those on the right going to player 2. Suppose that Player 1 chooses his strategy (10, 20 or 30), first, and subsequently, and after observing Player 1’s choice, Player 2 chooses his own strategy (of 10, 20 or 30). Which of the following statements is true regarding this modified game? I. It is a simultaneous move game, because the timing of moves is irrelevant in classifying games.II. It is a sequential move game, because Player 2 observes Player 1’s choice before he chooses his own strategy.III. This modification gives Player 1 a ‘first mover advantage’. A) I and IIB) II and IIIC) I and IIID) I onlyE) II onlyarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning