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Unformatted text preview: NAME: Econ 171 (Grossman) Spring 2010 Exam 2 May 13 You have 75 minutes to take this exam. Please answer all 4 questions, each of which is worth 15 points. Point subtotals are indicated. Show your work to obtain full credit. 1. Consider the extensiveform game shown in Figure 1. R L 1 r 1 2 , 1 l 1 1 , 2 2 r 2 l 2 , 3 2 r 1 , 4 l 2 , 2 1 Figure 1: The game from question 1. (a) [5] List the strategies for each player. (b) [5] Find the Nash Equlibria. (c) [5] Apply backwards induction and state the resulting SPNE. 1 B A 5 , 5 1 D C 2 F 4 , E 6 , 6 F 4 , 4 E , 4 1 Figure 2: The game from question 2. 2. Consider the game shown in Figure 2. (a) [5] Find all the purestrategy Nash equilibria of this game. (b) [5] Which of these are subgame perfect? (c) [5] Challenge question : There is a concept called forward induction that can be used to argue that one of the SPNE is unreasonable. We havent studied it in class, but the name kind of gives you a hint as to how to apply it. Look at theclass, but the name kind of gives you a hint as to how to apply it....
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This note was uploaded on 12/26/2011 for the course ECON 171 taught by Professor Charness,g during the Fall '08 term at UCSB.
 Fall '08
 Charness,G

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