Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 5CQQ
To determine
Relevance of Prisoner’s dilemma.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Sam and Sarah are thinking about getting married. However if either of them cheats on the other, they would get a payoff of 10, while the other person gets zero. If neither cheat, they stay with each other and get a payoff of 7 each and if both cheat, the relationship falls apart and each get a payoff of 1.
What is the Nash equilibrium of this game?
a. Cheat, Cheat
b. Not cheat, Not cheat
Sam cheats, Sarah doesn't
Sarah cheats, Sam doesn't
Use the following payoff matrix for a one-shot game to answer the accompanying questions. a. Determine the Nash equilibrium outcomes that arise if the players make decisions independently, simultaneously, and without any communication. Which of these outcomes would you consider most likely? Explain. b. Suppose player 1 is permitted to “communicate” by uttering one syllable before the players simultaneously and independently make their decisions. What should player 1 utter, and what outcome do you think would occur as a result? c. Suppose player 2 can choose its strategy before player 1, that player 1 observes player 2’s choice before making her decision, and that this move structure is known by both players. What outcome would you expect? Explain.
Roger and Rafael play a game with the following rules. Roger is given $250 to divide between himself and Rafael. Rafael does not get to choose but he can reject Roger’s offer if he does not like it. If Rafael rejects, both get nothing. If Rafael accepts, both get the split that Roger decided.
a. What is this game called?
b. Find all Nash equilibria for this game.
c. When this game is played in the real world, do the predictions in part 1b materialize? Why/why not?
d. Are all Nash equilibria in part 1b Pareto Optimal? Explain
Chapter 17 Solutions
Principles of Microeconomics (MindTap Course List)
Ch. 17.1 - Prob. 1QQCh. 17.2 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17 - Prob. 1CQQCh. 17 - Prob. 2CQQCh. 17 - Prob. 3CQQCh. 17 - Prob. 4CQQCh. 17 - Prob. 5CQQCh. 17 - Prob. 6CQQCh. 17 - Prob. 1QR
Ch. 17 - Prob. 2QRCh. 17 - Prob. 3QRCh. 17 - Prob. 4QRCh. 17 - Prob. 5QRCh. 17 - Prob. 6QRCh. 17 - Prob. 7QRCh. 17 - Prob. 1PACh. 17 - Prob. 2PACh. 17 - Prob. 3PACh. 17 - Prob. 4PACh. 17 - Prob. 5PACh. 17 - Prob. 6PACh. 17 - A case study in the chapter describes a phone...Ch. 17 - Prob. 8PACh. 17 - Prob. 9PA
Knowledge Booster
Similar questions
- Tucker and Eddie are playing the following game. Tucker can choose A or B and Eddie can choose C or D. The first payoff is for Tucker, the second for Eddie. Eddie Tucker C D A 3, 2 4, 3 B 4, 5 3, 4 Identify the Nash equilibrium(s) in this game. What rational game theoretic advice would you offer Tucker and Eddie on how to play this game? If Tucker and Eddie follow your advice, what payoff should each expect? Show your work.arrow_forwardReview Chapter 15, Table 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_forwardAnswer all the questions, show all the working. Consider the following game in normal form. Not cooperate Cooperate Not cooperate 20,20 50,0 Cooperate 0,50 40,40 What is Nash equilibrium? Is it efficient? Why? What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy. Calculate the discount factor (δ) that would make both players decide to cooperate.arrow_forward
- Use the following extensive-form game to answer the following questions. a. List the feasible strategies for player 1 and player 2. b. Identify the Nash equilibria to this game. c. Find the subgame perfect equilibrium.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_forwardQUESTION 4 Suppose there are 2 players in a non- cooperative game theory situation. Player A can move Up or Down while Player B can choose Left or Right. The following matrix contains the payoffs that each player receives under 4 scenarios. The first number in each cell refers to the payoffs for Player A. Player A Up Down A. B. C. 10, 60 D. 20, 80 Player B Suppose Player A moves first and Player B moves second. There is one equilibrium, Up, Left Left There is one equilibrium: Down, Right. 50, 90 40, 50 There are two equilibria, (Down, Left) and (Up, Right) Right There is one equilibrium in this game, Up Rightarrow_forward
- i. ii. QUESTION ONE A. A Nash equilibrium is a strategy profile such that every player's strategy is the best response to all the other players. It requires that each player makes a best response and that expectations regarding the play of other players are correct. Below is the table showing strategies and payoff for Player 1 and Player 2. PLAYER 1 R1 R2 R3 R4 C1 0,7 5,2 7,0 6,6 C2 2,5 3,3 2,5 2,2 PLAYER 2 C3 7,0 5,2 0,7 4,4 CA 6,6 2,2 4,4 10,4 REQUIRED; Transform the normal form game above into an imperfect extensive game form Find the Nash equilibrium for the game above using iterative deletion of strictly dominated strategies. Find the Nash equilibrium using brute force or cell by cell inspection.arrow_forwardThe study of how people make decisions in situations where attaining their goals depends on their interactions with others is called A. game theory. B. Nash equilibrium. C. the prisoners' dilemma. D. dominant strategy equilibrium.arrow_forwardWhat is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategiesarrow_forward
- The 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_forward9. In the game played in the class, "Guess 2/3 of the average", assume there are 3 students, each guesses a number between 0 and 100 (including 0 and 100) simultaneously. The winner will be the one whose number is closest to 2/3 of the average. Which of the following is a Nash Equilibrium for this game? A. Everyone guesses "0" B. Everyone guesses "100" C. One student guesses "0", one guesses "100" and one guesses "50" D. One student guesses "0", one guesses "0" and one guesses "100" E. None of the abovearrow_forwardConsider 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?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc