Econ398_Test2 - True-False Questions Answer A for"True and B for"False Each correct answer is worth 2 points Each wrong answer is worth zero points

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Version 1 Page 1 True-False Questions: Answer A for "True" and B for "False". Each correct answer is worth 2 points. Each wrong answer is worth zero points. Answers left blank are worth 1 point. Multiple-Choice Questions: Select the best answer. Each correct answer is worth 5 points. Each wrong answer is worth zero points. Answers left blank are worth 1 point. Use the following to answer questions 1-2: (The Fight Game) Each of two players has 1 unit of energy to put toward fighting or producing. Let y1 denote how much energy Player 1 spends fighting, 0 y1 1, and y2 Player 2's energy fighting, 0 y2 1. The rest of their energy goes toward production, so the total amount produced is 2-y1-y2. If y1>y2, then Player 1 gets all the production, and Player 2 gets nothing. If y2>y1, then Player 2 gets all the production and Player 1 gets nothing. If y1=y2, then they split the production evenly. 1. In The Fight Game, which of the following is a Nash equilibrium? A) y1=1/2, y2=1/2 B) y1=1, y2=1 C) y1=0, y2=1 D) y1 = 0, y2 = 0 E) None of the above 2. The Nash equilibrium in The Fight Game is Pareto Efficient. A) True B) False
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Version 1 Page 2 3. In the signaling game below, what strategy pair could not be part of the second stage of a Subgame Perfect Equilibrium? Otto Stag Hare Ludwig Stag 2 , 20 , 1 Hare 1 , 01 , 1 Otto Stag Hare Ludwig Stag 2 , , 1 Hare 1 , , 1 Ludwig “I’m hunting Stag” “I’m hunting Hare” A) Ludwig: Stag with probability .5; Otto: Stag with probability .5 B) Ludwig: Hare; Otto: Hare C) Ludwig: Hare; Otto: Stag D) Ludwig: Stag; Otto: Stag E) All of the above could happen in the second stage in a SPE.
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This note was uploaded on 03/13/2009 for the course ECON 398 taught by Professor Emre during the Spring '07 term at University of Michigan.

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Econ398_Test2 - True-False Questions Answer A for"True and B for"False Each correct answer is worth 2 points Each wrong answer is worth zero points

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