00exam - Prof. William H. Sandholm Department of Economics...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
–1– Prof. William H. Sandholm Department of Economics University of Wisconsin March 9, 2000 Midterm Exam – Economics 713 1. (20 points) Suppose that players 1 and 2 play the game below, and that it is common knowledge between them that both of them are rational. If we make no other assumptions about the players' knowledge, what is our best prediction about how they will play the game? 2. (20 points) Consider an infinite repetition of the game below, and consider the following repeated game strategy (which can be used by either player): "Play A in even periods and B in odd periods until someone deviates from this. Once anyone has deviated, play C forever." For what values of δ is it a subgame perfect equilibrium for both players to follow this strategy? 3, 3 3, 5 0, 0 0, 0 0, 0 0, 0 1, 1 5, 3 2, 2 A B C ABC 1 2 1, 4 0, 6 5, 2 3, 1 3, 5 7, 3 0, 0 2, 2 3, 1 A B C abc 1 2 d 2, 3 4, 3 3, 2 e 2, 5 3, 3 0, 0
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
–2– 3. (10 points) Does every normal form game have a Nash equilibrium in which no player places positive probability on a weakly dominated pure strategy?
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

00exam - Prof. William H. Sandholm Department of Economics...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online