MidtermwithAns - Game Theory, Econ 116A Midterm Exam, Fall...

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

View Full Document Right Arrow Icon
Game Theory, Econ 116A Midterm Exam, Fall 2010 Instructions: You must keep your notes and books closed. Switch off your cell phones, laptops and any other electronic device that you may be carrying. The exam is of 50 points and the maximum time allowed is one hour and 20 minutes. You may use calculator. 1. Consider the following Cournot duopoly model set up. ± ²³´ µ ¶·¸¹ºº»¼½¾¿À· Á ÂÃÄ ÅƺÅÀ ± ´Ç È ± ²´ Q is the aggregate quantity produced, and c is the identical constant marginal cost. a. If the firms choose their quantities simultaneously then how much output is produced in the Nash equilibrium? (5) b. Draw the best response functions of the two firms and show NE graphically. (4) c. How does the output change when the firms form a cartel? (5) d. Explain in words how this game is equivalent to the Prisoners’ Dilemma game. (5) 2. Two people enter a bus. Two adjacent cramped seats are free. Each person must decide whether to sit or stand. Sitting alone is more comfortable than sitting next to the other person, which is
Background image of page 1

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

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

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.

Page1 / 2

MidtermwithAns - Game Theory, Econ 116A Midterm Exam, Fall...

This preview shows document pages 1 - 2. Sign up to view the full document.

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