week10_answ

week10_answ - Department of Economics, University of...

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Page 1 of 3 Department of Economics, University of California, Davis Ecn 122 - Game Theory - Professor Giacomo Bonanno ANSWERS TO PRACTICE PROBLEMS for WEEK 10 1. (a) In Harsanyi’s theory a strategy for a player specifies an action for each one of his types . Albert has two possible types, and each has to use some action. So Albert has four pure strategies: Normal type swerves, reckless type swerves (s, s) Normal type doesn’t swerves, reckless type swerves (ds, s) Normal type swerves, reckless type doesn’t swerve (s, ds) Normal type doesn’t swerve, reckless type doesn’t swerve (ds, ds) Since Bill in effect only has one possible type (“normal”), a (pure) strategy for him is just an action, “swerve” (s) or “don’t swerve” (ds). So he has two pure strategies. (b) . The game starts with Nature choosing a type for Albert (the reckless type is chosen with probability 0.2). Only Albert is informed of his own type. See figure below.
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week10_answ - Department of Economics, University of...

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