ps10sol_09 - Cornell University Economics 3130 Problem Set...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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 2-by-2 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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

ps10sol_09 - Cornell University Economics 3130 Problem Set...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online