mock-final - Economics 302 Intermediate Microeconomics...

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Economics 302 Silve Parviainen Intermediate Microeconomics Spring 2007 Mock Final 1G a m e T h e o r y Astrategy( B )is weakly dominated by another strategy ( A )i f A yields a payoF which is at least as high as B , no mater what strategies chosen by the other player. Consider the following game between Row and Column. The ±rst number in the payoF pair is Row’s payoF, and the second Column’s. Table 1: Game matrix Column Left Right Top 10 , 7 p, 10 Row Bottom 12 , 57 ,q (a) Assume that p =7and q = 5. Solve the game by eliminating any weakly dominated strategies, by ±rst deleting Row’s weakly dominated strategies. What are the surviving strategies? (b) Now solve the game by ±rst deleting Column’s weakly dominated strategies. What are the strategies that remain? How do they compare to the surviving strategies in part (a)? (c) Assume that p = q = 6. Are there any weakly dominated strategies? Show that the outcomes that survive the deletion of dominated strategies are the same, regardless of whose strategies are deleted ±rst. 2 Externalities Claire runs a beekeeping company that produces honey. Claire’s operation is located beside an apple orchard.
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This note was uploaded on 09/27/2008 for the course ECON 302 taught by Professor Toossi during the Spring '08 term at University of Illinois at Urbana–Champaign.

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mock-final - Economics 302 Intermediate Microeconomics...

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