Practice_midterm20-1

Practice_midterm20-1 - ECON 100C Practice Midterm#2...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
page 1 of 3 ECON 100C Practice Midterm #2 QUESTION 1 (20 points) Consider the following sequential game with two stages: A single seller offers a good to a single buyer. In the first stage of the game, the buyer can choose between three different strategies: Offer $20 for the good, offer $40, or offer $60. In the second stage, the seller can accept or refuse the offer. The seller values the good at $32. If she does not sell the good, her payoff is zero. The buyer values the good at $45, and his payoff is zero if the seller rejects his offer. a) (4 points) Draw the game tree. b) (6 points) Find the Subgame Perfect Nash equilibrium of the game. c) (10 points) Now, assume that the order of the moves is reversed. In the first stage, the seller can offer the good for $20, $40, or $60, and in the second stage, the buyer can accept or refuse the offer. Draw the new game tree and find the Subgame Perfect Nash equilibrium. QUESTION 2 (20 points): a) (10 points) Consider the following simultaneous, static game: Player 2 E F G A 5, 6 3, 7 0, 4 Player 1 B 8, 3 2, 1
Image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern