ECN700-Midterm2

ECN700-Midterm2 - market and B will get 70%. What is the...

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Fall 2005 Econ 414 midterm exam Take extra time to write complete answers–significant points will be deducted for incomplete or unjustified answers. 1(a). Find all the pure strategy equilibria of the following game.(7 points) 1(b). Find the mixed strategy equilibrium of the same game.(8 points) R L R (2,6) (0,4) L (0,2) (1,6) 2. Two ice cream vendors must simultaneously pick where to put their cart on a boardwalk. The boardwalk is represented by [0,1] where 0 represents one end of the boardwalk, 1 represents the other end, .75 represents 75% of the way down, etc. Customers are evenly spread out and will buy from the closest vendor. For example, if vendor A picks .2 and vendor B picks .4, A will capture 30% of the
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Unformatted text preview: market and B will get 70%. What is the unique Nash Equilibrium of this game? Show both that it is an equilibrium and prove that any other combinations of actions is not. (15 points) 3. ± 1 2 2 ± ± L R l l r r 1: 4 3 2 2: 2 2 4 5 a) In the above game, suppose player one’s strategy is L and player 2’s strategy is always play r. Is this a subgame-perfect equilibrium? Demonstrate why it is or is not.(7 points) b) Write this game in normal form.(6 points) c) Find all equilibria of the game. Demonstrate whether it is or is not subgame perfect.(7 points) 1...
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This note was uploaded on 10/22/2009 for the course ECG 700 taught by Professor Morrill during the Fall '09 term at N.C. State.

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