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- 12. Consider a game where each player picks a number from 0 to 60. The guess that is closest to half ofthe average of the chosen numbers wins a prize. If several peopleare equally close, then they share theprize. The game theory implies that (A) all players have dominant strategies to choose 0 (B) all players have dominant strategies to choose 30 (C) there is a Nash equilibrium where all players pick 0 (D) there is a Nash equilibrium where all players pick positive numbers 13. Behavioral data in such games suggests that (A) most subjects choose 0; (B) most subjects choose 30; (C) common answers include 30, 15, 7.5, and 0; (D) most subjects use randomization. Can you help me answer number 13 please?Question 28 Suppose the following game: I Player 1 nice nice Player 2 50, 50 mean 90,20 Which of the following is true? mean 20,90 30, 30 O Both players play "mean" with a 70 % chance, and "nice" with a 30% chance. O There is no Nash Equilibrium in pure strategies, there is only one Nash Equilibrium in mixed strategies. Both players play "nice" with a 70% chance, and "mean" with a 30% chance. There is no Nash Equilibrium in mixed strategies, there is only one Nash Equilibrium in pure strategies.Consider the following sequential-move game: Player 1 Player 2 Player 3 Player 2 Player 3 R N LAF 3 E L 3 4 L R Player 1 Player 3 R EXE 5 L R L Pleaver g L Find the backward-induction equilibrium of this game. going 5 42" 5 44 Player 2 چلے Player 3 R O 5
- 2. Consider a game that game theory people refer to as the “ultimatum game.”We will refer to our two players as the “offerer” and the “decider”. How the gameworks is that the offerer proposes a way to split $1000 between the two players.While this could be done in a variety of ways, we will assume that the offerersonly has two possible proposals: Either a 50-50 split, or she offers the decider$50 and keeps the rest. The decider can either accept or reject the offer. If the offer is accepted, the money is split as proposed. If the offer is rejected, themoney spontaneously combusts and nobody gets anything. a) List the strategies for each player and write an extensive form version of thegame with payouts. b) List all the Nash equilibria of this game. c) Explain which, if any of the Nash equilibrium are not sub-game perfect. d) Write the game out in normal form and find the pure strategy Nashequilibrium. Explain how this matches with your answers to (b) and (c) . Alsoexplain why there…Question 1 What differentiates a Subgame Perfect Nash Equilibrium from a Nash Equilibrium? O A Subgame Perfect Nash Equilibrium requires that play in every subgame be perfectly informed, which Nash Equilibrium does not. O A Subgame Perfect Nash Equilibrium requires every that play in every subgame conform to a Nash Equilibrium. Nash Equilibrium itself does not. O Nash Equilibrium can involve mixed strategies, and a Subgame Perfect Nash Equilibrium cannot. O A Nash Equilibrium cannot contain incredible threats, but a Subgame Perfect Nash Equilibrium can. O Nash Equilibrium is only for strategic games. Subgame Perfect Nash Equilibrium is only for extensive form games. Question 2 What are the necessary components of a strategic game? O The matrix, the payoffs in each cell, the strategies. The players and their strategy sets. O The players, their strategy sets, and the payoff functions for each player. O The players, the game, and the equipment of their official sponsor Reebok "[slogan…6. Consider the following game in extensive form: At stage 1, player 1 chooses between R and D. - If he chooses D, player 1 gets 1 and player 2 gets 0; - If he chooses R, the game moves to the second round. • At stage 2, player 2 chooses between r and d. - If he chooses d, player 1 gets 0 and player 2 gets 2: - If he chooses r, the game moves to the second round.. At stage 3, player 1 chooses between R - If he chooses D, player 1 gets 3 and player 2 gets 1; - If he chooses R, the game moves to the second round. At stage 4, player 2 chooses between r and d. - If he chooses d, player 1 gets 2 and player 2 gets 4; - If he chooses R, both players get 3. a. Draw the tree representation of the game.
- 1. Consider the following sequential game: Left (3,5) Mary Go (6,4) Up Right John Stop (5.7) John (a) Draw the game tree of the game. John Go Down (4,1) Left Mary Stop (2,5) Right (6,-1) (John as player 1 and Mary as player 2) By backward induction, find a Nash equilibrium and the corresponding payoffs. 2. Eve and Noa start with $10 in each of their piles. They take turns choosing one of two actions, continue or stop, with Eve choosing first. Each time a player says continue, $10 will be removed from her pile, and $20 will be added to the other player's pile. The game automatically stops when the total amount in their piles reaches $60. (Eve as player 1 and Noa as player 2) (b) By backward induction, find a Nash equilibrium and the corresponding payoffs.Costco Spend $1B on advertising Spend $1.5B on advertising Spend $1B on advertising $3.5B; $2.7B $4.2; $2.2B Target Spend $1.5B on advertising $3.2B; $3.4B $4B; $3B4. Consider a two player game with Fred and Barney, who tal turns removing matchsticks from a pile. They start with 33 matchsticks, and Fred goes first. On each turn, ecach player may remove either one, two, three, four, or five matchsticks. The player to remove the last matchstick wins the game. What are the optimal strategies for each player? Who will win? b. Suppose now that they can remove up to six matchsticks, how will the optimal strategies change for- each player? a.
- Consider the following scenario to understand the relationship between marginal and average values. Suppose Crystal is a professional basketball player, and her game log for free throws can be summarized in the following table. Fill in the columns with Crystal's free-throw percentage for each game and her overall free-throw average after each game. Game Result Total Game Free-Throw Percentage Average Free-Throw Percentage Game 1 8/10 2 14/20 15/25 18/30 26/40 3 78°F Sunny 4 5 100 On the following graph, use the orange points (square symbol) to plot Crystal's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot her overall average free-throw percentage after each game. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. (?) O 8/10 6/10 1/5 3/5 8/10 90 F2 -0- @ F3 -0+ # 80 F4 $ F5 H OL % F6 ba 80 A I C F8 & 357 * F10 FO F11 Ea F12 2 Fn Lock Prt Sc +-- F 10:23 A…3. Consider the following two-player game: H L D T 2,3 0,2 4,0 1,1 (a) What are (pure- and mixed-strategy) Nash equilibria of this game? (b) Suppose the game is repeated twice, and each player's payoff is the sum of the payoffs they obtain in the two periods. What are the subgame perfect equilibria of the game? (c) Suppose the game is repeated indefinitely, and each player discounts his/her payoff with a discount factor 8 € (0, 1). Find a subgame perfect equilibrium in which (H, T) is played in every period on the equilibrium path. Compute the discount factor & needed for this equilibrium. (d) Suppose the game is repeated indefinitely, and each player discounts his/her payoff with a discount factor & € (0, 1). Find a subgame perfect equilibrium in which (H,T) and (L,T) are played alternately on the equilibrium path. Compute the discount factor & needed for this equilibrium. (e) Suppose the game is repeated indefinitely. Player 1 (the row player) discounts her payoff with a discount…3. Consider the following two-player game: H L T D 2,3 0,2 4,0 1,1 (a) What are (pure- and mixed-strategy) Nash equilibria of this game? (b) Suppose the game is repeated twice, and each player's payoff is the sum of the payoffs they obtain in the two periods. What are the subgame perfect equilibria of the game? (c) Suppose the game is repeated indefinitely, and each player discounts his/her payoff with a discount factor & € (0, 1). Find a subgame perfect equilibrium in which (H, T) is played in every period on the equilibrium path. Compute the discount factor & needed for this equilibrium. (d) Suppose the game is repeated indefinitely, and each player discounts his/her payoff with a discount factor 8 € (0, 1). Find a subgame perfect equilibrium in which (H,T) and (L,T) are played alternately on the equilibrium path. Compute the discount factor & needed for this equilibrium. (e) Suppose the game is repeated indefinitely. Player 1 (the row player) discounts her payoff with a discount…