final_2006

final_2006 - Professor Rod Garratt December 12, 2006 Econ...

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Professor Rod Garratt December 12, 2006 Econ 210B Final Exam – Fall 2006 You can earn up to 50 points on this exam. Explain everything that needs explaining. Good Luck! 1. There are two players, A and B. Player A has two one-dollar bills and player B has three one-dollar bills. Consider the following game. Each player has an envelope. Player A can put 0, 1, or 2 dollars into her envelope. Player B can put 0, 1, 2, or 3 dollars into his envelope. Players do not get back the money they put into the envelopes. However, if one player puts in strictly more one-dollar bills than the other does, the player who put in the most dollar bills gets 10 dollars. If the players put in the same number of dollar bills they both lose the money they put in and neither gets $10. The payoff matrix is as follows. Player B 0 1 2 3 Player A 0 2, 3 2, 12 2, 11 2, 10 1 11, 3 1, 2 1, 11 1, 10 2 10, 3 10, 2 0, 1 0, 10 Find all the Nash equilibria of this game. (7 points) 2. A single bidder in an auction has a value v for the item that is between 0 and 100. Let
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final_2006 - Professor Rod Garratt December 12, 2006 Econ...

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