This preview shows pages 1–2. Sign up to view the full content.
Cornell University
Economics 3130
Problem Set 10 Solutions
1. Using any method, ﬁnd
all
the Nash equilibria (in pure and mixed strategies) of the
game. Brieﬂy explain the steps you take in ﬁnding the equilibria.
Player 2
Player 1
L
C
R
T
3,4
4,2
2,1
M
1,7
3,8
0,0
B
1,0
1,1
4,3
The pure strategy Nash equilibria are (T,L) and (B,R). We have discussed several ways
to ﬁnd them. To ﬁnd mixed strategy Nash equilibria, notice ﬁrst that M is strictly
dominated by T. Even after eliminating M, none of Player 2’s strategies are dominated
by a pure strategy. However, C is dominated by a mixed strategy of .5 L and .5 R. If
we ask the question, will P2 every play a mixed strategy involving C, the answer is no
because any probability that the individual gave to the choice of C could be divided
between L and R and thereby increase the expected payoﬀ. With C removed, it is
simply a 2by2 game. As we discussed in class, we ask if there is a probability
p
of
playing T and 1

p
of playing B that leads P2 to be indiﬀerent between L and R.
π
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview. Sign up
to
access the rest of the document.
 Spring '06
 MASSON
 Economics, Microeconomics

Click to edit the document details