1. From the New York Times: In a "noncooperative game [...] [players) cannot convey intentions to each other." Do you agree? Discuss briefly.

Microeconomic Theory
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Chapter8: Game Theory
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1. From the New York Times: In a "noncooperative game [...] [players] cannot convey
intentions to each other." Do you agree? Discuss briefly.
2. In any competitive game there exists a unique strategy profile that is a Nash equi-
librium. True or false?
3. Consider a normal-form game. Let al such that Va-Ja : w (a), a-) < w (à, a-).
Prove or disprove that a is never a best-response.
4. A subgame perfect equilibrium of the Stackelberg game is also a Nash equilibrium
of the game in which players choose their quantities simultansously. True or false?
5. Consider an infinitely repeated normal-form game. Formulate a condition under
which all players playing grim trigger strategies constitutes a subgame perfect equi-
librium.
6. Provide an example where grim trigger strategies do not constitute a subgame per-
fect equilibrium.
Transcribed Image Text:1. From the New York Times: In a "noncooperative game [...] [players] cannot convey intentions to each other." Do you agree? Discuss briefly. 2. In any competitive game there exists a unique strategy profile that is a Nash equi- librium. True or false? 3. Consider a normal-form game. Let al such that Va-Ja : w (a), a-) < w (à, a-). Prove or disprove that a is never a best-response. 4. A subgame perfect equilibrium of the Stackelberg game is also a Nash equilibrium of the game in which players choose their quantities simultansously. True or false? 5. Consider an infinitely repeated normal-form game. Formulate a condition under which all players playing grim trigger strategies constitutes a subgame perfect equi- librium. 6. Provide an example where grim trigger strategies do not constitute a subgame per- fect equilibrium.
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