PS1_Solutions

PS1_Solutions - ECN 166 - Game Theory Fall, 2008 Homework...

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ECN 166 - Game Theory Fall, 2008 Homework Assignment 1 Solutions 1. Given the problem description we can construct the game tree as follows: 2. The game tree is given below. Note the following payo/s structure is used: for each day that a student is wrong, he receives -1 (ie. he loses 1 pt) and for every day that he is correct, he receives 1 pt. The opposite is true for the Professor. Therefore, more points can be gained if the game is played longer. (This is just one interpretation of the payo/s to each player.)How to read the tree:
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Wednesday, or Friday. The second mover is the student who doesn±t know which day the test has been scheduled. On Monday, he must decide whether the test is today or later. If the test was, in fact, scheduled for Monday, the game ends and payo/s to the professor and student are given accordingly. If the test wasn±t scheduled for Monday, the game continues. On Wednesday, the student must again decide whether the test is today or later. Again, if the test is scheduled for Wednesday, the game ends. Otherwise, the game continues onto Friday where the student faces the same decisions. But since the test must be scheduled for one of the three days, and it hasn±t already happened, the student knows for certain that the test will be scheduled for Friday and will sensibly choose "Today". The irrelevant decision "later" has been removed from the Friday information sets. Note that the student has 7 information sets. On Monday, the student doesn±t know whether the professor has scheduled the test for Monday, Wednesday, or Friday. His decision nodes on Monday make up one information set. On Monday, he decides whether the test will be "Today" or "Later". If the test wasn±t scheduled for Monday, the student must make this decision again on
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This note was uploaded on 03/03/2011 for the course ECON 414 taught by Professor Staff during the Spring '08 term at Maryland.

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PS1_Solutions - ECN 166 - Game Theory Fall, 2008 Homework...

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