HW1+2Solutions - eliminate M. R weakly dominates L...

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HW Solutions HW 1 1. Game I a. M strictly dominates T eliminate T. b. R and C strictly dominate L eliminate L. c. B strictly dominates M eliminate M. d. C strictly dominates R eliminate R. Thus the IEDS solution for this game is the strategy profile (B,C). This is also the Nash equilibrium of the game. 2. Game II There are three possible ways of using IEDS for this game. A. T strictly dominates B eliminate B. L weakly dominates R eliminate R. T strictly dominates M eliminate M. The IEDS solution is (T, L). B. T strictly dominates M
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Unformatted text preview: eliminate M. R weakly dominates L eliminate L. T strictly dominates B eliminate B. The IEDS solution is (T, R). C. T strictly dominates both M and B eliminate M and B. The IEDS solutions are (T, L) and (T, R). The game has two NE: (T, L) and (T, R). HW 2 1. a. Player 2 always chooses D. b. Player 1 chooses C if 3a > 1+ a; D if 1+ a > 3a; and is indifferent between C and D if 3a = 1+ a. c. The NE of the game are: (C, D) if a > ½; (D, D) if a < ½ ; and (C,D) and (D,D) if a = ½....
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This note was uploaded on 11/27/2010 for the course ECON Econ 116A taught by Professor Neerjaaggarwal during the Winter '10 term at UC Irvine.

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