econpexam - Practice Exam 2 1. Take the following gambles:...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Practice Exam 2 1. Take the following gambles: A 1 = 0.3 $10 B 1 = 0.1 $5 0.7 $0 0.9 $0 A 2 = 0.6 $10 B 2 = x $5 0.4 $0 y $0 Assume that you prefer A 1 to B 1 , and that you prefer B 2 to A 2 . Your preferences can be summarized by some von-Neumann/Morgenstern utility function for all of the following values of (x,y) except for: a. x = 0.2, y = 0.8 b. x = 0.5, y = 0.5 c. x = 0.7, y = 0.3 d. x = 0.9, y = 0.1 e. None of the above For questions 2 and 3, refer to the following game: 3,0 1,2 2,3 4,1 1,1 2,1 U D R L R L 1 2 2 M M
Background image of page 1

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

View Full DocumentRight Arrow Icon
2. How many pure strategy Nash equilbria are there in this game? a. 0 b. 1 c. 2 d. 3 e. None of the above 3. Which of the following is a Nash equilibrium of this game? a. (U, LL) b. (D, RM) c. (U, LM) d. (D, LL) e. None of the above For questions 4 and 5, refer to the following game: Jooyong Left Right Roy Up 1,0 0,2 Down 0,2 3,0 4. With what probability will Jooyong choose to play Right in Nash equilibrium? a. 0 b. ¼ c. ½ d. ¾ e. None of the above 5. If we increase Jooyong’s payoff to the outcome (Down, Left) from 2 to 4, with how much more probability will Jooyong play Left in Nash equilibrium? (i.e. what is the difference between the probability placed on Left in this new game and the probability placed on Left in the original game?) a. ¼ b. ½ c. ¾ d. 1 e. None of the above
Background image of page 2
6. Recall the signaling stag hunt game from lecture. How many subgame perfect
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/14/2010 for the course ECON 398 taught by Professor Emre during the Spring '07 term at University of Michigan.

Page1 / 6

econpexam - Practice Exam 2 1. Take the following gambles:...

This preview shows document pages 1 - 4. Sign up to view the full document.

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