ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Two people have $4 to divide between themselves. They use the following process to divide the money. Each
person names a number of dollars (a nonnegative integer), at most equal to 4. If the sum of the mounts that
the people name is at most 4, then each person receives the amount of money she names (and the remainder
is destroyed). If the sum of the amounts that the people name exceeds 4 and the amounts named are
different, then the person who names the smaller amount receives that amount and the other person receives
the remaining money. If the sum of the amounts that the people name exceeds 4 and the amounts named are
the same, then each person receives $2.
(a) Write a payoff matrix to represents the game.
(b) Find all strictly dominated strategies for each player.
(c) Find all weakly dominated strategies for each player.
(d) Find all the Nash equilibria of the game in pure strategies.
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Transcribed Image Text:Two people have $4 to divide between themselves. They use the following process to divide the money. Each person names a number of dollars (a nonnegative integer), at most equal to 4. If the sum of the mounts that the people name is at most 4, then each person receives the amount of money she names (and the remainder is destroyed). If the sum of the amounts that the people name exceeds 4 and the amounts named are different, then the person who names the smaller amount receives that amount and the other person receives the remaining money. If the sum of the amounts that the people name exceeds 4 and the amounts named are the same, then each person receives $2. (a) Write a payoff matrix to represents the game. (b) Find all strictly dominated strategies for each player. (c) Find all weakly dominated strategies for each player. (d) Find all the Nash equilibria of the game in pure strategies.
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