PS3-solutions

# PS3-solutions - Sketch of Solutions to Problem Set 3 Ying...

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Sketch of Solutions to Problem Set 3 Ying Chen ECN 416 Game Theory 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? strictly dominates . After deleting , strictly dominates . (b) Find the (pure strategy) Nash equilibria of this game. pure strategy Nash equilibria: (  ) , (  ) . (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. We can show this by contradiction. Suppose is a Nash Equilibrium, but some strategies in the strategy pro f le can be eliminated by iterated deletion of strictly dominated strategies. Then, there must be a f rst strategy that was eliminated in this process. Call it . But since is a best response to and none of has been eliminated, this can’t be true. 2. The Sneetches Revisited

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## This note was uploaded on 04/04/2010 for the course ECN 416 taught by Professor Y.chen during the Spring '10 term at ASU.

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PS3-solutions - Sketch of Solutions to Problem Set 3 Ying...

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