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Midterm #1
9 February 2010
This test contains three problems. Each part of each question is worth 10 points
for a maximum of 100 points. Answer all questions (showing your work where
necessary). You have 75 minutes to complete the test. Good Luck!
1.
Static Games of Complete Information:
Find all the Nash Equilibria (including
any mixed strategy Nash Equilibria) in the following 3 games.
(a)
Player 2
L
R
Player 1
U
1,2
3,5
D
1,1
4,2
(b)
Player 2
L
R
Player 1
U
6,3
0,0
D
1,1
2,2
(c)
Player 2
L
R
T
8,0
5,12
Player 1
M
3,0
6,8
B
2,10
10,8
2.
Cournot with Increasing Marginal Costs:
Consider the Cournot model of compe
a quantity to bring to the market.
The price is determined by the total quantity
brought to the market:
P
(
Q
) =
P
(
q
1
+
q
2
) = 100
q
1
q
2
. However, assume now
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 Spring '10
 Jack
 Game Theory

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