Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 13, Problem 3Q
To determine
Meaning of “Prisoner’s dilemma” and the nature of the strategies used by the players.
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Students have asked these similar questions
Consider the following game where two players have to decide if they want to buy a movie ticket or a baseball ticket. They have the highest payoffs when they both buy tickets to the same activity, but must decide simultaneously what to buy without knowing what the other person will do.
a. Does either player have a dominant strategy?
b. How many equilibria does this game have?
c. Is this an example of a prisoner’s dilemma? Explain.
d. What will be the outcome if your friend buys their ticket first and you can observe their choice?
The following is a static game:
Convert this game into dynamic form game.
Find the Nash equilibrium and subgame perfect Nash equilibrium of this game.
If you consider this game as dynamic then what kind of dynamic game is this.
Use the following normal-form game to answer the following questions. a. For what values of x is strategy D (strictly) dominant for player 2? b. For what values of x is strategy B (strictly) dominant for player 1? c. For what values of x is (B, D) the only Nash equilibrium of the game?
Chapter 13 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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Similar questions
- What is the nash equilibrium of the game "sticks"?arrow_forwardConsider the following four games where players Row and Column each have two strategies: A and B. Which of the following games illustrates a prisoners’ dilemma?arrow_forwardWhat is game theory? How does it relate to strategic decision making? What do the phrases dominant strategy and Nash Equilibrium mean as they apply to game theory?arrow_forward
- How many sellers/firms is a few? How would you define “strategic decision-making?” How does game theory relate to strategic decision-making?arrow_forwardHow do we solve a Sequential-move game?arrow_forwardTable 15.4, Prisoner Dilemma. Suppose the game starts with both Jesse and Frank planning to “Stay Mum” in the lower right cell. Discuss how each player would evaluate the situation and decide whether to change decisions. If each player makes decisions to minimize the penalty, in which cell will this game end? Is there a Nash equilibrium?arrow_forward
- Which player (if any) has a dominate strategy? What is the Nash Equilibrium of this game? Does the game satisfy the definition of prisoner dilemma?arrow_forwardThe following payoff matrix represents a simultaneous-move game between two players: Kay and Jack. Each player has two choices: Black or White. The first number in each cell is the payoff to Kay, and the second number is the payoff to Jack. Jay Black White 50, 30, Black 50 30 Кay 45, 40, White 30 50 Refer to the scenario above. Which is true? a. This game has a dominant strategy equilibrium. b. This game has two dominant strategy equilibria. c. This game has two Nash equilibria. d. This game has one Nash equilibrium.arrow_forwardIs the solution to the prisoner’s dilemma game a Nash equilibrium? Why? The solution to the prisoner’s dilemma game is a Nash equilibrium because no player can improve his or her payoff by changing strategy unilaterally. The solution to the prisoner’s dilemma game is not a Nash equilibrium because players do not end up in the best combination for both. The solution to the prisoner’s dilemma game is not a Nash equilibrium because both players can improve their payoffs by cooperating. The solution to the prisoner’s dilemma game is a Nash equilibrium because it is a noncooperative game in which both players have to expect that the other is purely selfish.arrow_forward
- What is game theory? How can firms use game theory?arrow_forwardCan you explain what the Pure Coordination Game is and provide an example of one?arrow_forwardUse the following normal-form game to answer the questions below. Player 1 (B.C) (B.D) (A.C) (A.D) Strategy A B a. Identify the one shot Nash equilibrium. 60, 60 30, 130 Yes Player Z D 130, 30 80, b. Suppose the players know this game will be repeated exactly three times, Can they achieve payoffs that are b shot Nash equilibrium?arrow_forward
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