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Problem Set 7-1

# Problem Set 7-1 - 4 A Solve the following game using...

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Econ 100A Microeconomics Professor Reynolds Department of Economics University of California, Berkeley Problem Set 7 Due 8:10 am April 28 1. 17.3 A.b, A.e, A.f, A.g, and B all parts & part e below. e. If my wife’s utility is state dependent (5ln x in the good state and 2ln x in the bad state), what is the policy she purchases? 2. 22.7 All parts, except A.g, A.h, A.i, and B.d. For Part B.b, use the utility function ln y. For part B.e, use the graphs from class, not from the text. 3. a. Find all the Nash equilibrium outcomes in the following game: A B C D E F 0, 1 0, 1 0, 1 1, 2 1, 2 G 0, 1 1, 2 1, 2 0, 1 0, 1 H 1, 2 0, 1 1, 2 0, 1 1, 2 I 1, 2 1, 2 0, 1 1, 2 0, 1 b. Select one, and write the players’ full strategies that support this equilibrium.

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Unformatted text preview: 4. A. Solve the following game using iterated elimination of dominated strategies. H M L H -13, -8 -1, -4 7, -4 M -4, -1 4, -1 4, -4 L 1, 2 1, -1 1, -4 .b. Find the other Nash Equilibria outcomes 5. Find the Nash equilibria by writing the strategic form of this game. Which of these is subgame perfect? Suppose that there can be two levels of preparedness for gumdrops in defending against an attack by the jelly beans: High or Low. Regardless the level of preparedness, each side has available two options of what it can do: fight or accommodate. The jelly beans payoff is listed first. Gum drops Gum drops Gum drops Jelly Beans Jelly Beans H L f a f f f f f a a a a a -1/2, -1/2 -1, 1 1, -1 0, 0 -3/4, -1/4 -2, 2 0, 0 1, 3...
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