242q2s02

# 242q2s02 - c(Down Left and(Up Right d(Down Right e(Up Right...

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ECONOMICS 242 QUIZ 2 SPRING 2002 PLEDGE:____________________________ NAME:______________________________ 1. (3) A Nash Equilibrium is an equilibrium where: a. Each player is getting her highest payoff. b. Each player is following her best strategy, given the strategy of the other player. c. Each player is choosing a strategy that maximizes her payoff and minimizes her opponent’s payoff. d. Both player’s agree to share the largest payoffs. Player B Left Right Player A Up .5, .5 -3, 1 Down 1, -3 -4, -4 2. (3)The above game is a game of: a. Assurance b. Prisoner’s Dilemma c. Chicken d. Battle of the Sexes/Battle of the Cultures 3. (3)The Nash Equilibria in the above game are: a. (Up, Left) b. (Up, Left) and (Down, Right)

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Unformatted text preview: c. (Down, Left) and (Up, Right) d. (Down, Right) e. (Up, Right) 4. (6) Find the Nash Equilibrium of the following game using the minimax method. Country A wants high payoffs. Country B wants low payoffs. Explain the method by which you found the equilibrium. Country B High Tariff Quota WTO complaint Sanctions-4 5 13 Embargo-2-3 8 Country A High Tariff 6 7 9 Quota 5 3-1 5. (5) Suppose that the two players in an oligopoly have the following reaction functions: Describe what the reaction function (or best response function) says about each player’s strategy in the context of this example. P A 10 5 5 10 P B Reaction function for Player B Reaction function for Player A...
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## This test prep was uploaded on 04/22/2008 for the course ECON 242 taught by Professor Nonnenmacher during the Spring '06 term at Allegheny.

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242q2s02 - c(Down Left and(Up Right d(Down Right e(Up Right...

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