1. Static and Dynamic Game. Consider the following 2-by-2 game: 2 C D 1A (1,10) (1,1) B (2,a) (0,1) (a) erwise, find the pure-strategy Nash equilibria, if any of this game. (There is no need to look for equilibria in mixed strategies) Assume for now that a = 2. Using dominant strategies or oth- (b) Now, consider the dynamic game in which player 1 moves before player 2, and the payoffs remain unchanged. i.: possible strategies for each player? Recall that a strategy profile for a player not at the initial node of the game tree must specify an action for the player at every node. Draw the game tree for this dynamic game. What are the ii Find the backward-induction solution(s) to this game. Calculate the equilibrium payoffs for each player. Com- iii. pared to the simultaneous game, is there a first-mover advantage or a second-mover advantage?
1. Static and Dynamic Game. Consider the following 2-by-2 game: 2 C D 1A (1,10) (1,1) B (2,a) (0,1) (a) erwise, find the pure-strategy Nash equilibria, if any of this game. (There is no need to look for equilibria in mixed strategies) Assume for now that a = 2. Using dominant strategies or oth- (b) Now, consider the dynamic game in which player 1 moves before player 2, and the payoffs remain unchanged. i.: possible strategies for each player? Recall that a strategy profile for a player not at the initial node of the game tree must specify an action for the player at every node. Draw the game tree for this dynamic game. What are the ii Find the backward-induction solution(s) to this game. Calculate the equilibrium payoffs for each player. Com- iii. pared to the simultaneous game, is there a first-mover advantage or a second-mover advantage?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter15: Strategic Games
Section: Chapter Questions
Problem 3MC
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