problem set 1 - EF4484 Economic Strategy and Game Theory...

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Semester A, 2008 Prof. Steven Tucker Homework Assignment 1 Maximum possible points = 100 1a. (20 points) Consider the following game with the following payouts. As usual, more is considered to be better than less. Show that this game is dominance solvable. Prisoner 2 Confess Not Confess Confess 2, 2 0, 5 Prisoner 1 Not Confess 5, 0 ½, ½ 1b. (20 points) Suppose the game is modified by allowing a third choice for each player; viz, Partly Confess as follows. Is it true that Prisoner 1 is better off not confessing to the crime no matter what Prisoner 2 does? Explain. Prisoner 2 Confess Not Confess Partly Confess Confess 2, 2 0, 5 1, 3 Not Confess 5, 0 ½, ½ ¾, ¼ Prisoner 1 Partly Confess 3, 1 ¼, ¾ 1, 1 1c. (20 points) Is there any other outcome of the game – other than both players not confessing – that is sensible? Your answer should informally explain why you find any other outcome sensible (if you do). 1
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This note was uploaded on 02/22/2009 for the course ECONOMICS 4313 taught by Professor Tsui during the Spring '09 term at HKU.

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problem set 1 - EF4484 Economic Strategy and Game Theory...

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