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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 vonNeumann/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
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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
6.
Recall the signaling stag hunt game from lecture. How many subgame perfect
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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.
 Spring '07
 Emre

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