Econ 3070 section 4 Some games for you to play. Have fun! (Please, look for Nash Equilibria along the way.) ------------------------------ |—————————————————| GAME 6 | Player B | |————————+————————| | B1 | B2 | |——————————+————+————————+————————| | | A1 | 30, 30 | 40, 20 | | Player A |————+————————+————————| | | A2 | 20, 40 | 35, 35 | |——————————+————+————————+————————| 1. In Game 6 above, a. Player A has a dominant strategy. b. Player B has a dominant strategy. c. both players have dominant strategies. d. neither player has a dominant strategy. (NE is A1, B1). 2. One of the main lessons from a repeated game that is most applicable to business decisions is a. you must maximize profits. b. you must anticipate the reactions of your competitors. c. you must minimize costs. d. ignoring your competitors allows you to focus on your company's profits. ------------------------------ |————————————————| GAME 2 | Player B | |———————+————————| | B1 | B2 | |——————————+————+———————+————————| | | A1 | 6, 6 | 4, 12 | | Player A |————+———————+————————| | | A2 | 12, 4 | 10, 10 | |——————————+————+———————+————————| 3. Game 2 above a. is an example of a prisoner's dilemma game. b. is not an example of a prisoner's dilemma game. c. has no Nash equilibrium. d. has multiple Nash equilibria in pure strategies. (NE is A2,B2).v. 1--Page 2 ------------------------------ |———————————————————————| GAME 7 | Player B | |———————————+———————————| | B1 | B2 | |——————————+————+———————————+———————————| | | A1 | -60, -60 | 0, -120 | | Player A |————+———————————+———————————| | | A2 | -120, 0 | -12, -12 | |——————————+————+———————————+———————————| Game 7 is an example of prisoners' dilemma. Thus, the payoff matrix contains jail sentences in terms of months. 4. For Game 7, a. Player A has a dominant strategy. b. Player B has a dominant strategy. c. both players have dominant strategies. d. neither player has a dominant strategy. ------------------------------ |—————————————| GAME 1 | Player B | |——————+——————| | B1 | B2 | |——————————+————+——————+——————| | | A1 | 5, 6 | 7, 2 | | Player A |————+——————+——————| | | A2 | 4, 5 | 9, 1 | |——————————+————+——————+——————| 5. In Game 1 above, a. Player A choosing A1 and Player B choosing B1 is a Nash equilibrium. b. Player A choosing A2 and Player B choosing B2 is a Nash equilibrium. c. there is no Nash equilibrium. d. there are multiple Nash equilibria in pure strategies.v. 1--Page 3 ANSWER KEY +-------+------+--------+------+--------+--------+--------+--------+------+ | Text | Bank | Exam | | | Ques | Diff | Lrng | | |Chapter| Ref |Question|Answer| Type | Cat | Lvl | Obj | Page | +-------+------+--------+------+--------+--------+--------+--------+------+ | 14 24 1 c MChoice A 598 | | 14 40 2 b MChoice F 614 | | 14 4 3 b MChoice A 597 | | 14 28 4 c MChoice A 597 | | 14 3 5 a MChoice A 598 | +-------------------------------------------------------------------------+ Radio-Station Game (from Roger McMain “Game Theory”) WIRD KOOL Rock Country All talk Rock 35,35 50,40 80,10 Country 40,50 20,20 40,10 All talk 10,80 10,40 5,5 (2 NE: (Country, Rock) and (Rock,