# 167hw6 - Game Theory Steven Heilman Please provide complete...

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Game Theory Steven Heilman Please provide complete and well-written solutions to the following exercises. Due February 23rd, in the discussion section. Homework 6 Exercise 1. Recall the Game of Chicken is defined as follows. Each player chooses to chicken out (C) by swerving away, or she can continue drive straight (D). Each player would prefer to continue driving while the other chickens out. However, if both players choose to continue driving, catastrophe occurs. The payoffs follow: Player II C D C (6 , 6) (2 , 7) Player I D (7 , 2) (0 , 0) Find all Nash equilibria for the Game of Chicken. Prove that these are the only Nash equilibria. Then, verify that z = 1 / 3 1 / 3 1 / 3 0 is a Correlated Equilibrium. Can you find a Correlated Equilibrium such that both players have a payoff larger than 5? (Hint: when trying to find such a matrix z , assume that z 22 = 0 and z 12 = z 21 .) Exercise 2. In the Game of Chicken, you should have found only three Nash equilibria.

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• Fall '08
• staff
• Game Theory, Nash equilibria, Nash, correlated equilibrium

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