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- a. Consider the following sequential game. Player 1 A B Player 2 Player 1 a a B Player 2 (4) () y i. Determine the subgame perfect Nash equilibria and their outcomes. ii. Determine the Nash equilibria of the game. For each of the Nash equilibria, argue why no player has a profitable deviation. ii. Determine which parts of the Nash equilibrium strategies involve uncredible threats.Consider the strategic form game shown. a. Assume that both players are rational. What happens?b. Assume that both players are rational and that each believes that theother is rational. What happens?c. Find the strategies that survive the ISDS.For the static game, whose payoff matrices are given above, answer the following questions: a. What is the IESDS prediction of the game’s outcome? Explain!b. Find all rationalizable strategies?c. Find all the Nash Equilibrium including mixed strategy equilibrium if any?d. What the difference between the solution concept in (a), (b), and (c).
- PART A Which of the following statements is true? A. In a finitely repeated prisoner’s dilemma, players choose to cooperate in every period. B. In a Nash equilibrium, each player has a dominant action. C. A Nash equilibrium is always characterized by the highest payoffs. D. A subgame perfect equilibrium is a Nash equilibrium. E. None of the other answers is correct. PART B Which of the following statement is true: A. Since the subsidy increases both consumer surplus and producer surplus, subsidy does not create any deadweight loss. B. None of the other answers is correct. C. In general, the burden of the tax falls on the more elastic side of the market. D. There can never be price ceiling and price floor that are simultaneously binding in the same market. E. The economic incidence of the tax depends on who must legally pay the tax.a. (D,R,A) and (U,L,B) are the only Nash equilibria in pure strategies. b. (M,R,A) and(D,R,B) are the only Nash equilibria in pure strategies. c. (D,R,A) and (D,R,B) are the only Nash equilibria in pure strategies. d. (M,R,A) and (U,L,B) are the only Nash equilibria in pure strategies. e. (D,R,A) and (M,R,B) are the only Nash equilibria in pure strategies.When there's uncertainty as to the length of a game A. cooperation can potentially occur if trigger strategies are adopted. B. firms will randomize among the Nash equilibria. C. cooperation still does not occur, because cooperation unravels at the beginning of the game. D. firms will cooperate because they treat the game as one that is infinitely repeated.
- Please answer all parts. Two construction companies EdilA and EdilB take part in a race contract to build a school. Both can bid 1000, 2000 or 3000. The winner (the lowest offer) builds the school and pays 900 of costs. 1. When both bid the same amount, EdilA wins the contract. Find the Nash equilibrium. 2. Assume instead that when both bid the same, neither gets the contract, and furthermore suffer a penalty of 10. Find the Nash equilibrium. 3. Assume instead that when both bid the same, each builds half the school (but sustains 600 of costs, thus more than half). Find the Nash equilibrium. 4. Under the hypothesis of point 2 assume that EdilB can observe the offer made by EdilA before it makes its offer, and that EdilA anticipates that. Find the Nash equilibrium by backward induction of this sequential game.Player 1 Cooperate (C) Defect (D) Cooperate (C) 3,3 8,0 Player 2 Defect (D) 0,8 1,1 In general, a combination of strategies is a Nash equilibrium if ... Every player is choosing a best response against the other players' strategies. Every player has a positive payoff. The players maximize the sum of their payoffs. The players choose identical strategies. If the game is repeated, which cooperative actions could benefit both players? O Both players choose C. Player 1 chooses C, Player 2 chooses D. O Player 1 chooses D, Player 2 chooses C. Both players choose D.1) What are the Nash equilibria? Which one is unreasonable/non-credible threat? 2) What are the subgame perfect Nash equilibria? Does SPNE concept eliminate the unreasonable Nash equilibrium?
- • (1,0) (1,1) Player 2 G D H (2,0) Action Player 1 Player 1 Action B Player 1 (3,-1) E Player 2 (0,1) (-1,-1) (a) Find all the Subgame Perfect Nash equilibria in this game. (b) Find all the Nash equilibria in this game. (Hint: write the game in strategic form.)Japan's Elpida Memory entered court management and was acquired by Micron. The media reportedthat it was the result of the semiconductor chicken game.■Question (a) Where is the Nash Equilibrium?■Question (b) What is the mixed-strategy equilibrium? – find out x and y■Question (c) What is the probability of a chicken game?MULTIPLE CHOICE (identify the one best answer below and explain your reasoning for each option): If James is the leader in the game then: (hint: you can draw the game tree to see it better)a. There are two equilibrium outcomes that coincide with the Nash equilibria.b. The unique equilibrium outcome is James playing Rooster and Buzz playing Chicken.c. The equilibrium outcome is the same as if Buzz were the leader.d. All of the above.e. None of the above