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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
![Let G be the following static game.
Rose
Colin
A
A (3,4)
B (4,2)
B
(1,5)
(0, 1)
(a) Determine the pure Nash equilibria of G.
(b) Rose A, B, Colin A, B is a mixed Nash equilibrium of H. (You do not have to
verify this.) Determine the expected payoffs of both players given that they choose
their strategies according to this Nash equilibrium.
(c) Draw the payoff polygon of H. Indicate on your diagram the points corresponding
to the Nash equilibria of H, and the points corresponding to Pareto optimal solu-
tions of H.](https://content.bartleby.com/qna-images/question/ff96c817-2786-47a8-b31a-16a95ba30e9e/47182014-01e4-4c97-bc70-fa1f21c37865/senu5r_thumbnail.jpeg)
Transcribed Image Text:Let G be the following static game.
Rose
Colin
A
A (3,4)
B (4,2)
B
(1,5)
(0, 1)
(a) Determine the pure Nash equilibria of G.
(b) Rose A, B, Colin A, B is a mixed Nash equilibrium of H. (You do not have to
verify this.) Determine the expected payoffs of both players given that they choose
their strategies according to this Nash equilibrium.
(c) Draw the payoff polygon of H. Indicate on your diagram the points corresponding
to the Nash equilibria of H, and the points corresponding to Pareto optimal solu-
tions of H.
Expert Solution
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Step 1
Given
Game matrix
Colin | |||
A | B | ||
Rose | A | (3,4) | (1,5) |
B | (4,2) | (0,1) |
To find pure strategies Nash-equilibria, we will find the best response for Rose and Colin. The intersection of the best response will be the pure strategies Nash equilibria.
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