a) Check each game for dominance solvability. Use Game 3 to explain why it is important to describe an equilibrium by using the strategies employed by other players, not merely the payoffs received in equilibrium. b) Find the Nash Equilibria of those games. Note that every equilibfium in domi- nated strategies that you found in a) is also a NE. This is generally the case: if an equilibrium is found by iterated elimination of (weakly) dominated strate- gies, it is also a Nash equilibrium. Can you explain why this must be the case?

a) Check each game for dominance solvability. Use Game 3 to explain why it is important to describe an equilibrium by using the strategies employed by other players, not merely the payoffs received in equilibrium. b) Find the Nash Equilibria of those games. Note that every equilibfium in domi- nated strategies that you found in a) is also a NE. This is generally the case: if an equilibrium is found by iterated elimination of (weakly) dominated strate- gies, it is also a Nash equilibrium. Can you explain why this must be the case?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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