14.12 Game Theory
Prof. Muhamet Yildiz
Fall 2010
Homework 4
Due on 11/9/2010 (in class)
Youneedtoshowyourworkina
l
lquest
ions
.
1. Consider a
f
nitely repeated game with the following stage game (in which players
decide between a soccer game or a movie):
2
1
0
0
0
0
1
2
Thegameisrepeated
2
+1
times; each player’s payo
f
in the repeated game is the
sum of his payo
f
s in the stage games, and the previous plays are observable. Find
and a subgameperfect equilibrium in which in the
f
rst period player 1 plays
and
player 2 plays
.
2. A union and an employer negotiate the wage
. The possible dates are
=0
1
2
.
If they agree on
at date
,thepayo
f
s of the union and the employer are
and
(1
−
)
, respectively, where
∈
(0
1)
.Onth
eda
t
e
s
=0
1
3
4
3
3
+1
the union proposes a wage, and on the dates
=2
5
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 Spring '11
 LieWang
 Game Theory, strategy profile, subgameperfect equilibrium, Prof. Muhamet Yildiz

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