EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 17.4, Problem 2.1TTA
To determine
Impact on decision to kick or go for it.
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Students have asked these similar questions
.
In a gambling game, Player A and Player B both have a $1 and a $5 bill. Each player selects one of the bills without the other player knowing the bill selected. Simultaneously they both reveal the bills selected. If the bills do not match, Player A wins Player B's bill. If the bills match, Player B wins Player A's bill.
a. Develop the game theory table for this game. The values should be expressed as the gains (or losses) for Player A.
b. Is there a pure strategy? Why or why not?
c. Determine the optimal strategies and the value of this game. Does the game favor one player over the other?
d. Suppose Player B decides to deviate from the optimal strategy and begins playing each bill 50% of the time. What should Player A do to improve Player A’s winnings? Comment on why it is important to follow an optimal game theory strategy.
The next 3 questions involve the following game. There are two players,
a husband and wife. They can either be selfish (S) or selfless (U) in their
marriage. If they choose to be selfish, then there is a negative ʻguilt’ payoff
of g. The payoff matrix is below.
Figure 1: The Marriage Game
Wife
S
U
S
10-g, 10-g
15-g, 2
U
2, 15-g
12, 12
Number left (right) of comma refers to H's (W's) payoff.
23. Suppose that g = 0. What is the Nash equilibrium (or equilibria)?
(A) (S, S).
(B) (U, S) and (S, U).
(C) (S, S) and (U, U)
(D) (U, U).
24. Suppose that g= 5. What is the Nash equilibrium (or equilibria)?
(A) (S, S).
(B) (U, S) and (S, U).
(C) (S, S) and (U, U)
(D) (U, U).
25. Suppose that g = 10. What is the Nash equilibrium (or equilibria)?
(A) (S, S).
(B) (U, S) and (S, U).
(C) (S, S) and (U, U)
(D) (U, U).
Husband
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.
Chapter 17 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 17.3 - Prob. 1MQCh. 17.3 - Prob. 2MQCh. 17.3 - Prob. 1.1MQCh. 17.3 - Prob. 1.2MQCh. 17.3 - Prob. 2.2MQCh. 17.3 - Prob. 1.3MQCh. 17.3 - Prob. 1TTACh. 17.3 - Prob. 2TTACh. 17.4 - Prob. 1TTACh. 17.4 - Prob. 2TTA
Ch. 17.4 - Prob. 1.1TTACh. 17.4 - Prob. 2.1TTACh. 17.4 - Prob. 1MQCh. 17.4 - Prob. 1.2TTACh. 17.4 - Prob. 2.2TTACh. 17.5 - Prob. 1MQCh. 17.5 - Prob. 2MQCh. 17.6 - Prob. 1TTACh. 17.6 - Prob. 2TTACh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQCh. 17 - Prob. 17.1PCh. 17 - Prob. 17.2PCh. 17 - Prob. 17.3PCh. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Prob. 17.7PCh. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10P
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