Consider the following 2-person static game with three strategies for each player. The payoff matrix shown...
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Consider the following 2-person static game with three strategies for each player. The payoff matrix shown below represents this game. Player 2 Left Center Right Top 100,100 30,150 -40,90 Player 1 Middle 150,30 50,50 5,60 Bottom 90,-40 60,5 10,10 a. Identify if there is a strictly dominated strategy for each player; namely, can you find a pair of strategies si, s, such that the payoffs for player & from following s; are strictly worse than from s for every possible strategy choice of player j? b. Based on common knowledge of rationality - the fact that everyone is rational, and everyone knows everyone is rational, etc. - we can eliminate strictly dominated strategies. Do it, and represent the resulting game in a 2 x 2 matrix. c. Identify if there is a strictly dominant strategy equilibrium. Is this also a Nash equilibrium? Consider the following 2-person static game with three strategies for each player. The payoff matrix shown below represents this game. Player 2 Left Center Right Top 100,100 30,150 -40,90 Player 1 Middle 150,30 50,50 5,60 Bottom 90,-40 60,5 10,10 a. Identify if there is a strictly dominated strategy for each player; namely, can you find a pair of strategies si, s, such that the payoffs for player & from following s; are strictly worse than from s for every possible strategy choice of player j? b. Based on common knowledge of rationality - the fact that everyone is rational, and everyone knows everyone is rational, etc. - we can eliminate strictly dominated strategies. Do it, and represent the resulting game in a 2 x 2 matrix. c. Identify if there is a strictly dominant strategy equilibrium. Is this also a Nash equilibrium?
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We must compare each strategys payoffs to those of the other strategies used by the same player in o... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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