1. Alan and Beatrice are students who are suspected of colluding on their assignment. Theexaminers are going to interview each of them individually, in separate rooms. Alan and Beatricemust each choose whether to Deny or Confess. The following diagram shows Alan's preferencesover the possible outcomes when he is completely selfish (red, vertical lines) compared to when heis somewhat altruistic (green curves). Based on this information, determine whether each of thefollowing statements is true or false.80-(D, C)70-Beatrice's payoff60-5040-302010-10 10(D, D) Both deny(D, C) = Alan denies and Beatrice confesses(C, D) - Alan confesses and Beatrice denies(C, C)= Both confess11(C, C)(D. D)20 30 40 50Alan's payoff(C, D) -60 70 80(a) When Alan is completely selfish, denying is his dominant strategy.(b) When Alan is somewhat altruistic, denying is his dominant strategy.(c) When Alan is completely selfish and Beatrice is somewhat altruistic, confessing is Alan'sdominant strategy.(d) When Alan and Beatrice are both completely selfish, (C, D) is the dominant strategyequilibrium as it is on the highest indifference curve for Alan.

Answered: Image /qna-images/answer/00b25066-000a-43b0-8b75-3c2b8808bd61.jpg

1. Alan and Beatrice are students who are suspected of colluding on their assignment. The examiners are going to interview each of them individually, in separate rooms. Alan and Beatrice must each choose whether to Deny or Confess. The following diagram shows Alan's preferences over the possible outcomes when he is completely selfish (red, vertical lines) compared to when he is somewhat altruistic (green curves). Based on this information, determine whether each of the following statements is true or false. 80- (D, C) 70- 60- Beatrice's payoff 50 40- 30- 20 10 0 0 10 (D.D) - Both deny (D, C)-Alan denies and Beatrice confesses (C, D)-Alan confesses and Beatrice denies (CC)-Both confess (C,C) (D.D) (C,D) 20 30 40 50 60 70 80 Alan's payoff (a) When Alan is completely selfish, denying is his dominant strategy. (b) When Alan is somewhat altruistic, denying is his dominant strategy. (c) When Alan is completely selfish and Beatrice is somewhat altruistic, confessing is Alan's dominant strategy. (d) When Alan and Beatrice are both completely selfish, (C, D) is the dominant strategy equilibrium as it is on the highest indifference curve for Alan.

1. Alan and Beatrice are students who are suspected of colluding on their assignment. The examiners are going to interview each of them individually, in separate rooms. Alan and Beatrice must each choose whether to Deny or Confess. The following diagram shows Alan's preferences over the possible outcomes when he is completely selfish (red, vertical lines) compared to when he is somewhat altruistic (green curves). Based on this information, determine whether each of the following statements is true or false. 80- (D, C) 70- 60- Beatrice's payoff 50 40- 30- 20 10 0 0 10 (D.D) - Both deny (D, C)-Alan denies and Beatrice confesses (C, D)-Alan confesses and Beatrice denies (CC)-Both confess (C,C) (D.D) (C,D) 20 30 40 50 60 70 80 Alan's payoff (a) When Alan is completely selfish, denying is his dominant strategy. (b) When Alan is somewhat altruistic, denying is his dominant strategy. (c) When Alan is completely selfish and Beatrice is somewhat altruistic, confessing is Alan's dominant strategy. (d) When Alan and Beatrice are both completely selfish, (C, D) is the dominant strategy equilibrium as it is on the highest indifference curve for Alan.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

See similar textbooks

Similar questions

Consider a setting in which player 1 moves first by choosing among threeactions: a, b, and c. After observing the choice of player 1, player 2 choosesamong two actions: x and y. Consider the following three variants as towhat player 3 can do and what she knows when she moves:a. If player 1 chose a, then player 3 selects among two actions: high andlow. Player 3 knows player 2’s choice when she moves. Write down theextensive form of this setting. (You can ignore payoffs.)b. If player 1 chose a, then player 3 selects among two actions: high andlow. Player 3 does not know player 2’s choice when she moves. Writedown the extensive form of this setting. (You can ignore payoffs.)c. If player 1 chose either a or b, then player 3 selects among two actions: high and low. Player 3 observes the choice of player 2, but not that of player 1. Write down the extensive form of this setting.(You can ignore payoffs.)
Kayla and Kevin are friends who go together to a used textbook seller who has two copies ofthe biology book that they both need for their class this semester. The cost to the seller ofacquiring the books was $25 each and no other students will need this book. Kayla states thatshe is willing to pay $40 for the book, while Kevin says he is willing to pay $80. Which ofthe following describes the most likely conclusion to this scenario? Group of answer choices The seller will sell the books to both Kayla and Kevin for $40 each because if they tried tocharge Kevin a higher price, Kayla would engage in arbitrage. The seller will sell one book to Kayla for $40 and one book to Kevin for $80 because thismarket meets all three requirements for price discrimination. The seller will sell the books to both Kayla and Kevin for $80 each because Kevin's highervalue exceeds Kayla's willingness to pay. The seller will sell the books to both Kayla and Kevin for $25 each because that is howmuch the…
learn.canterbury.ac.nz Clasarsom Nov 15-ICO EUC LEARN | AKO See the game below and answer the questions 8 to 11: Player-1 C Player-2 X, Y Y Player-1 9 14 8. Player-2 16 17 16 Nash Equilibrium in this game: Select one: O a. Playert: C; Player2: X O b. Playert: C; Player2: Y Oc. Playert: L; Player2: X Od. Playert: L; Player2: Y e. None
In game theory, a dominant strategy is the best strategy to pick, no matter which moves are chosen by the other player. O to make the exact same move that was made by the other player. the choice that causes the payoff for the other player to be minimized, regardless of the payoff it earns the best strategy to pick, assuming the other player makes his or her best possible choice. to allocate all personnel resources towards defensive talent in order to dominate opposing offenses. 46°F
Exercise 6.1Suppose that two airlines decide to collude. Analyse the game between these two companies. Suppose that each of them can charge for tickets a high price or a low price. If one of them charges 100 euros, it gets few profits if the other also charges 100 euros and high profits if the other charges 200 euros. On the other hand, if the company charges 200 euros, it obtains very little profit if the other charges 100 euros and an average profit if the other also charges 200 euros. a) Represent the matrix of results of this game. b) What is the Nash equilibrium in this game? Explain your answer. c) Is there an outcome that would be better than the Nash equilibrium for the two airlines? How could it be achieved? Who would lose out if it were reached?
In the movie Rebel Without a Cause, James Dean and Buzz Gunderson compete for thefavours of sixteen year old Judy. Buzz's gang members steal two cars. The group of teenagers gathers on aLos Angeles lookout, with a cliff that drops down to the Pacific Ocean. James and Buzz are to drive the stolencars toward the cliff. The first person to jump from his car is declared the chicken (which is bad). The lastperson to jump is the hero (which is good), capturing Judy's affection and the gang's respect. The driverlesscars continue over the cliff and plunge to the rocks at its base.Each driver can make two possible actions. Jump when he feels endangered (be a chicken) or jump AFTERthe other driver jumps (be a rooster). Assuming that both feel endangered at the same moment, the followingmatrix represents the payoffs for James and Buzz for each choice of strategy.BuzzChicken RoosterJames Chicken 3, 3 -10, 20Rooster 20, -10 -50, -50 PLEASE ANSWER THE BELOW QUESTION WITH REFERECE TO THE ABOVE…
2.19. Standard setting. Suppose Apple and Samsung are in the process of negotiating a common standard for a new 3D camera tech- nology they plan to introduce in the next generation of smartphones. Apple has a preference for standard A, whereas Samsung has a pref- erence for standard S. However, both recognize that multiple stan- dards are a worse outcome for all. Specifically, Apple gets 240 if it selects A and Samsung does so too, but only 20 if Samsung does not adopt A. If Apple adopts standard S and Samsung does so too, then Apple gets a payoff of 190. If, however, Samsung chooses A then Ap- ple gets zero. For Samsung, the situation looks similar: If Samsung chooses standard S and Apple does the same then Samsung gets 210, but if Apple chooses A the Samsung's payoff is only 30. If Samsung opts for standard A and Apple does so too then Samsung gets a pay- off of 110, whereas if Apple chooses standard S then Samsung gets a payoff of zero. (a) Suppose that both Apple and Samsung…
10. Player A and Player B are playing a game . First , Player A chooses to either " Keep " or " Pass " . Second , Player B observes A's choice and Player B then chooses to either Keep or Pass . This process continues which creates the sequential game below . Please mark decisions that rational and selfish players will choose at every decision node ( 3 decisions by player A and 3 decisions by player B ) - mark them on the Figure . What is the equilibrium of this game ?
The prisoners’ dilemma is a two-person gameillustrating thata. the cooperative outcome could be worse for bothpeople than the Nash equilibrium.b. even if the cooperative outcome is better thanthe Nash equilibrium for one person, it might beworse for the other.c. even if cooperation is better than the Nashequilibrium, each person might have an incentivenot to cooperate.d. rational, self-interested individuals will naturallyavoid the Nash equilibrium because it is worsefor both of them.
. 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.
2 Consider Anna and Joe, who value a certain good by the same amount v and can choose to either contribute (C) e to get the good or not (N) where v > e> 0. Obtaining the good only requires c from one person. The game is summarized in the payoff table below: Joe V-c,V-c V-c,V v,V-c 0,0 Find a pure strategy equilibrium and a mixed strategy equilibrium. Anna O Z
There are a kicker and a goalie who confront each other in a penalty kick that willdetermine the outcome of the game. The kicker can kick the ball left or right, while the goaliecan choose to jump left or right. Because of the speed of the kick, the decisions need to bemade simultaneously. If the goalie jumps in the same direction as the kick, then the goalie winsand the kicker loses. If the goalie jumps in the opposite direction of the kick then the kickerwins and the goalie loses. Model this as a strategic form game and write down the matrix thatrepresents the game you modeled. Find the Nash equilibrium.