Question 14 Consider the game below with a worker (W) and a firm (F). The worker initially can choose to acquire skills or not acquire skills. If the worker does acquire skills, the firm then gets to decide whether to compensate the worker or not. The extensive form of the game and the payoffs are below. Which of the following is true? We Acquirre Not Acquire C Compensate Not Compensate (0,0) (10.10) (-5,20)
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- You and a coworker are assigned a team project on which your likelihood or a promotion will be decidedon. It is now the night before the project is due and neither has yet to start it. You both want toreceive a promotion next year, but you both also want to go to your company’s holiday party that night.Each of you wants to maximize his or her own happiness (likelihood of a promotion and mingling withyour colleagues “on the company’s dime”). If you both work, you deliver an outstanding presentation.If you both go to the party, your presentation is mediocre. If one parties and the other works, yourpresentation is above average. Partying increases happiness by 25 units. Working on the project addszero units to happiness. Happiness is also affected by your chance of a promotion, which is depends on howgood your project is. An outstanding presentation gives 40 units of happiness to each of you; an aboveaverage presentation gives 30 units of happiness; a mediocre presentation gives 10 units…Consider a Variant oF the uitimatum qame we Studicd inclasS in which players have Fairness considerations. The timing OF the qame is vsual. First , Player 1 propasar the split (100 -x, x) XE [0,100]. Player 2 observes split & decides whether to accept (in which case they recieve Moncy according proposed Split) or reject (in Which case they both get žero dollars).But now player i's utility equals to her monetary Vtility minus the disutility From unFairneas proportion al to the diFfrene in Monetary outCOMES . That is, given a final Split (m. ,m.) let OF a hundred dollars to player 2,Where u, (m. ,m.) = m, -B. (m, - m2)* Ui (m.,m.) = m, - P. (m, -m.) Where Pi,Pz are parametens of the game indicating haw strongly Players care a bout Fairness. Noté that the case we Considered corres pands to B, = Bz =0 Let B,=0 7, 10 (a) Which oFFes will player 2.derinitely allept ? revect ? Describe all sequentially rational Strategies For player 2. (b) For cach seqventialy ratianal Strategy of player 2…Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming year. Assume that Alabama is currently spending $15 million on their recruiting andfacilities, and Clemson is spending $10 million. Each team has an additional $5 million to spendor keep as profits. If they both choose to not spend the additional $5 million then Alabama hasa 60% chance of getting the highest quality quarterback recruit to commit to them (getting thecommitment of the player is the goal). However, if they both choose to spend the additional $5million then there is a 57% chance that Alabama gets the high quality quarterback to commit. IfAlabama spends the additional $5 million but Clemson doesn’t then there is a 67% chanceAlabama gets the recruit. However, if Alabama does NOT spend the additional $5million butClemson does then there is a 50% change either team gets the recruit’s commitment. Setup thepayoff matrix and label the players, their strategies, and their payoffs, and…
- Consider the game below with a worker (W) and a firm (F). The worker initially can choose to acquire skills or not acquire skills. If the worker does acquire skills, the firm then gets to decide whether to compensate the worker or not. The extensive form of the game and the payoffs are below. Which of the following is true? W Acquirre Not Acquire There is no Nash equilibrium. C Compensate Not Compensate This game has a single Nash equilibrium. There are two Nash equilibria. None of the above. (0,0) Both players have a strictly dominant strategy. (10,10) (-5,20)i am not sure how to ask anther question after the expert answered one of mine but here is a question i asked the expert and the naswer he game me in picture 1 & 2. the questions insnt linked from other sites its from bartleby just coudlnt see option to ask anther. can you answer this part now: Now assume the financial advisor knows that another advisor will offer a competitive portfolio. Based on historical data, he knows this competitive portfolio’s total return follows a normal distribution with mean £36mil and standard deviation of £2mil and is priced at 5% of total return. Clients will naturally choose the advisor which offers the portfolio with the highest net How does the distribution of profit over the range of financial prices considered in part B) changes, when the competitor is considered?b)Rachel’s objective is to maximize the expected profit, subject to that Emma works for Racheland Emma puts effort. However, effort level is not observable. Hence, Rachel needs to writea contract based on the observables. Let’s say, Rachel pays Emma based on the outcome: xLwhen the profit is $0, xM when the profit is $2000, and xH when the profit is $3,000. ThenEmma has three options:(i) Not to work for Rachel(ii) Work for Rachel without effort(iii) Work for Rachel with effortFind Emma’s expected utility on each optionc)ssuming Rachel wants Emma to put effort, her objective essentially becomes to find thelowest contingent payment scheme that is just enough for Emma to work for Rachel, andgives an incentive for Emma to put effort. Formally, we can write this as:min 0.1xL + 0.3xM + 0.6xH ,subject to0.1√xL + 0.3√xM + 0.6√xH − 5 ≥ 15, (1)and0.1√xL + 0.3√xM + 0.6√xH − 5 ≥ 0.6√xL + 0.3√xM + 0.1√xH . (2)What is Constraint (1) called? What is Constraint (2) called?d) or your information, the…
- Consider a Variant aF the uitimatum qame we Studicd incllass in which playcrs have Fairness considerations. The timing OF the qame is usual. First , Player 1 propase the split (100 -X", x) OF a hundred dallars to player 2,Where X E [0,100]. Player 2 observes split & decides whether to accept (in which case they recieve Money accor ding t1 proposed Split) or reject (in Which case they both get žero dollars).But now player i's Utility equals to her monetary Vtility minus the disutility From unFairneas proportional to the differene in Monetary OutCOMeS . That is, given a final Split (m. ,m.) Iet u, (m. ,m.) = m, -B. (m, - m2) U, (m. ,m,) = m, - P. (m, -m.) Where Pi,ßz are parametens oF the game indicating how strongly Players care a bout Fairness. Note that the case we Considered corres ponds to B, = P2 = 0 (a) represent this game in Exten siye form b) Describe the Gets of Strategies OF each playerFirst Player can invest $1.00 with Second Player. Second Player chooses whether tc cooperate and make the promised investment, or appropriate and keep First Player'a $1.00. Based on the payoff matrix shown below (first player payoffs on bottom left of cell, second player payoffa on upper right of cell), what will be First Player's payoff if contracis are not enforceable? Second Player Cooperate Appropriate Invest 1.5 1.0 First Player 1.5 -1.0 Don't Invest3. Find the saddle point, if it exists, for the following game. (b) Solve the following game by using the principle of dominance and find the probabilities of strategies for each player and the value of the game. Player B Player A II III IV V 3 4 4 II 2 4 III 4 4 IV 4 4 20 2420 8760
- A game is played as follows: First Player 1 decides (Y or N) whether or not to play.If she chooses N, the game ends. If she chooses Y, then Player 2 decides (Y or N) whetheror not to play. If he chooses N the game ends. If he chooses Y, then they go ahead and playanother game with the payoffs shown below. A player who opts out by choosing N gets 2 andthe other player gets 0. Draw the tree of this game and then find the two subgame-perfect Nashequilibria.The figure depicts the efficiency wage equilibrium of a worker and a firm. Based on this information, which of the following statements is correct? socosts Worker's best response curve 610 12 Hourly wage, S O This is a sequential game where the firm chooses its action given the worker's best responses to its actions. Therefore the worker receives no rent. O AIA, given that the firm pays the hourly wage of $12, the worker's best response is to exert an effort of 0.5. O The employer makes profits by coercing the worker to put in some effort O ALA, given that the worker exerts an effort level of 0.5, the firm's best response is to offer the hourly wage of $12.1. What is the expected value of playing this game ? a. The player repeatedly rolls a six - side d die until it comes up 6. b. When the die comes up 6 , the player receives a payoff, and the game ends. The player get s precise ly one payof f. c. The initial payoff is $6, and it increases by 20%. The f irst roll payoff is $6 ; the second roll payoff is $7.20 (1.2*$6) ; the third roll payoff is $8.64 (1.2*$7.20), and so on. What is the expected value of playing this game?