problem set 4

# problem set 4 - Econ 102B(SSII 2008 Problem Set 4 PART...

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Econ 102B (SSII 2008) Problem Set 4, PART 1 (You don’t need to turn in solutions) 1) Tristan and Isolde had made plans to meet either at the soccer game or at the opera.  Yet, they have lost all means of communication before finalizing their plans. They both  know that: (a) both would enjoy going on a date, (b) Tristan prefers meeting at the opera  house, and (c) Isolde is a fan of soccer. Write down a set of appropriate payoffs for this  “battle of the sexes” game in a 2 by 2 matrix (you can use the payoffs of the example  given in lecture). Is this a game of conflict or a game of coordination? If it is a game of  coordination (or conflict), is there still an element of conflict (coordination)? Explain. Find  all the Nash equilibria of this game (in both pure and mixed strategies). Plot the best  response functions of the two and locate all the Nash equilibria on this graph. 2) Simon’s preferences over his wealth can be represented by the utility function U(w) =

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## This note was uploaded on 07/06/2009 for the course ECON 102b taught by Professor Ozan during the Summer '08 term at UC Riverside.

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problem set 4 - Econ 102B(SSII 2008 Problem Set 4 PART...

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