Answered: 1 \ 2 a b c A 2,2 2,1 0,0…

1 \ 2 a b c A 2,2 2,1 0,0 B 3,1 3,0 1,3 C 1,3 3,2 3,1 a) Eliminate iteratively all strictly dominated strategies. b) Find all Nash

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

Chapter18: Auctions

Section: Chapter Questions

Problem 4MC

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Question

1 \ 2	a	b	c
A	2,2	2,1	0,0
B	3,1	3,0	1,3
C	1,3	3,2	3,1

a) Eliminate iteratively all strictly dominated strategies.

b) Find all Nash equilibria.

c) What is the player 1’s best response to the strategy σ2 = (z , ½ , ½ - z) of player 2, where z is a parameter that lies in the closed interval [0, ½].

d) Compute the payoffs to player 1 and to player 2 for their respective strategy profiles σ1 = (0,½,½) and σ2 = (½,0,½).

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