Watson_Text_Answers_1st_Ed - Chapter 2 1a) A E A Ad B AE 3...

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Chapter 2 1a) ( )( )( )( )( )( ) A A B B E N Ad D A E D E A N D N A E D E 3 6 1 5 0 0 3 1 6 5 4 3.5 1b) ( )( ) (10-a B )a A - a A ^2 0 (10-a A )a B - a B ^2 10a - a^2 a a A a B A B B A E D 0 00
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2) ( )( )( )( )( )( )( )( ) 0 100 0 100 100 0 100 0 10 0 10 0 10 0 10 0 100 0 100 100 0 100 0 100 J J M M L A B R A G A R B G B A R B R A R B R A G B G A G B G 3) ( )( )( )( )( )( ) -1 1 0 -1 0 0 -1 0 -1 1 0 1 0 1 1 0 S N S N W O M H R D H R
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4) ( )( )( )( )( )( )( ) P N P N P N AG 22 1 H H L H H L L L H L 11 5) 6) q 1 q 2 q 1 q 2 0 0 0 0 ( ) (2-q1-q2)q1 (2-q1-q2)q2 ( ) (2-q1-q2)q1 (2-q1-q2)q2
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7) ( )( )( )( )( )( )( )( )( ) 1 2 R P S R P S R S R S 0 -1 1 1 0 -1 -1 1 0 0 1 -1 -1 0 1 1 -1 0 8) It's irrelevant. 9) ( )( )( )( )( )( ) A BB C H F H H F H H F F F Y N Y N 0 -1 1 0 1 -1 0 0 0 0 0 0 0 1 -1 0 -1 1
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Chapter 3 1) {} S LPR LPN LNR LNN SPR SPN SNR SNN K = ′′ ,, , SP N E = , 2) { } , A SE A d E D N A d N D = { } ,,, B E NE N SA A A D D A D D = (Where the first entry indicates the action taken if firm A enters the market and the second entry indicates the action taken if firm A doesn't enter the market.) 3) B L = , { } M AB AB AB AB SR R R G G R G G = { } J RG RG RG RG A A B B A B B = 4) No; it must also specify what the manager would have done in case the manager had hired the worker and the worker exerted high effort as well as in the case where the manager had hired the worker and the worker exerted low effort. 5) No. If we assume during the 2nd round a player observes what the other player did, there are nine information sets at which the player makes his 2nd move. A strategy has to specify the 1st move as well as the move at each of those subsequent nine information sets. If the 1st move of the opposing player is not observed prior to one's 2nd move, there are still three subsequent information sets (one for each of one's possible 1st moves) that must be separately dealt with by any strategy. 6) [ ) SO I 1 0 SH H H L L H L L 2 = ′′′′
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Chapter 4 Vaticrat 1) Eisner P N LPR 40,110 80,0 LPN' 13,120 80,0 LNR 0,140 0,0 LNN' 0,140 0,0 SPR 35,100 35,100 SPN' 35,100 35,100 SNR 35,100 35,100 Katzenberg SNN' 35,100 35,100 2) Firm B AA AD DA DD EA 3,3 3,3 6,1 6,1 EDa 1,6 1,6 5,5 5,5 DeA 0,4 0,3.5 0,4 0,3.5 Firm A DeDa 0,4 0,3.5 0,4 0,3.5 3a) Player 2 CE CF DE DD A 0,0 0,0 1,1 1,1 Player 1 B 2,2 3,4 2,2 3,4 3b) Player 2 I O OU 1,1 1,1 OD 1,1 1,1 IU 4,0 -1,-1 Player 1 ID 3,2 -1,-1
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3c) Player 2 AC AD BC BD DE 6,2 2,2 6,2 2,2 DF 2,6 2,2 2,6 2,2 UE 3,3 3,3 5,4 5,4 Player 1 UF 3,3 3,3 5,4 5,4 3d) Player 2 A B UXW 3,3 5,1 UYW 3,3 3,6 UXZ 3,3 5,1 UYZ 3,3 3,6 DXW 4,2 2,2 DYW 4,2 2,2 DXZ 9,0 2,2 Player 1 DYZ 9,0 2,2 3e) Player 2 U D A 2,1 1,2 B 6,8 4,3 Player 1 C 2,1 8,7 3f) Player 2 A B UXP 3,8 1,2 UXQ 3,8 1,2 UYP 8,1 2,1 UYQ 8,1 2,1 DXP 6,6 5,5 DXQ 6,6 0,0 DYP 6,6 5,5 Player 1 DYQ 6,6 0,0
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4) [ ) () 0, , 1,2 ,( 2 ) ; , 1 , 2 ; i iij i ji Si uss s ssij i j =∞ = =− = 5) [ ) [ ) [ ) {} 1 2 :0 , 0 , S Sf f 2 ) ; , 1 , 2 ; = 6) Don't bother with this one.
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Chapter 5 Vaticrat 1a) 0 b) 4 c) 6 d) () () ( ) uC 11 1 3 0 2 3 10 0 4 20 3 σ , =+ + = e) uR 1 4 3 1 2 6 1 4 6 21 4 , =++= f) ) ( ) uL 010 12 03 2 , + = g) () () 21 1 3 3 2 3 40 6 11 3 , =++ = h) u 212 1 2 1 4 0 1 4 10 1 2 3 1 2 1 4 10 1 4 2 1 2 1 4 3 1 4 6 1 2 6 9 2 σσ , + ++ + + = 2a) Player 2 X Y H z,- z,- Player 1 L 0,- 10,- b) uH z z z 1 2 1 2 , μ =+= and 1 2 0 1 2 10 5 , = so indifferent if z = 5 .
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This note was uploaded on 09/05/2008 for the course ECONOMICS ECON 3M03 taught by Professor Brucejames during the Fall '08 term at McMaster University.

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Watson_Text_Answers_1st_Ed - Chapter 2 1a) A E A Ad B AE 3...

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