4. Game theory terminology Complete the following table by selecting the term best described by each definition. Definition A player's best choice, if it exists, regardless of their opponent's strategy A case in which individually rational behavior leads to a jointly inefficient outcome A set of strategies (one for each player) in which each player's strategy is the best option for that player, given the chosen strategy of the player's opponents Payoff Matrix Dominant Strategy Nash Equilibrium Tit-for-tat Strategy Prisoners' Dilemma Game O Collusion

Topic is information economics

1. Consider the following normal form game. X Y (a) What is the set of rationalizable strategies for this game? Player 1 Player 2 W Q 1,7 1,5 2,3 Z 3,4 0,4 0,6 R= (b) The game has only one Nash equilibrium and it is a mixed strategy Nash equilibrium. Compute and report this equilibrium. Equil. strategy profile:

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11. Game theory terminology Complete the following table by selecting the term best described by each definition. A set of strategies (one for each player) in which each player's strategy is the best option for that player, given the chosen strategy of the player's opponents A strategy in which a player cooperates until the other player defects and then defects until the other player cooperates again The event that occurs when agents in a game form an agreement about which strategies to implement Tit-for- Definition Payoff Matrix Dominant Strategy Nash tat Prisoners' Dilemma Equilibrium Strategy Game Collusion A player's best choice, if it exists, regardless of their opponent's strategy O O O O O O O O O O

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