Problem Set 3
Ying Chen
ECN 416 Game Theory
Three questions due Thursday, February 11, at the beginning of class
1. Nash Equilibria and Iterated Deletion
Consider the following game.
2
0
1
1
4
2
3
4
1
2
2
3
1
3
0
2
3
0
(a)
What strategies survive iterated deletion of strictly dominated strategies?
(b)
Find the (pure strategy) Nash equilibria of this game.
(c)
Argue as carefully but as concisely as you can that, in general (not just in this
game), strategies that form part of a Nash equilibrium are never eliminated by iterated
deletion of
strictly
dominated strategies.
2.
The Sneetches
Revisited
Asweassumedinc
lass
,thereare
(2
+1)
sneetches and they prefer to have a rarer
charcterisic. In particular, assume that if fewer than
1
2
of them have star bellies, then
the ones with star bellies have a payo
f
of
1
while the ones with plain bellies have a
payo
f
of
0
; if fewer than
1
2
of them have plain bellies, then the ones with plain bellies
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 Spring '10
 Y.Chen
 Game Theory, Nash equilibria, iterated deletion

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