Economics 302
Silve Parviainen
Intermediate Microeconomics
Spring 2007
Answers to Mock Final
1
Game Theory
(a) Game matrix 1 presents the game when
p
= 7 and
q
= 5.
Since the Row player goes first, he eliminates
Table 1: Game matrix 1
Column
Left
Right
Top
10
,
7
7
,
10
Row
Bottom
12
,
5
7
,
5
strategy T. (See game matrix 2)
The outcomes that survive the deletion are (B, L) and (B, R).
Table 2: Game matrix 2
Column
Left
Right
Row
Bottom
12
,
5
7
,
5
(b) Game matrix 3 shows the result if the Column player moves first. He will eliminate strategy L.
The
outcomes that survive the deletion are (T, R) and (B, R). Only (B, R) is in common with (a).
(c) Game matrix 4 presents the game when
p
=
q
= 6.
In this case, there are no weakly dominated
strategies. Moreover, it doesn’t matter who chooses first in this game since there are strictly dominated
strategies for both players.
T is strictly dominated by B for the Row player, and L is strictly dominated by R for the Column
player. Therefore, the solution is (B, R) no matter who starts the game.
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Table 3: Game matrix 3
Column
Right
Top
7
,
10
Row
Bottom
7
,
5
Table 4: Game matrix 4
Column
Left
Right
Top
10
,
7
6
,
10
Row
Bottom
12
,
5
7
,
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 Spring '08
 TOOSSI
 Economics, Game Theory, marginal costs, game matrix

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