Homework Econ 221
1.
Write down the payoff matrix for Rock paper scissors where you get a payoff of 1 for
winning, 1 for losing and zero for a draw.
Is there a pure strategy Nash Equilibrium?
Rock
Paper
Scissors
Rock
Paper
Scissors
2.
Consider a noncooperative simultaneous game between me and my wife.
I get to
pick the food for the evening, but she gets to pick the drink.
The payoff matrix is below
(I’m player 1, she is player 2).
Solve for the pure strategy nash equilibrium.
Beer
Whiskey
Wine
Pizza
5, 1
4, 3
1, 2
Steak
4, 3
7, 4
1, 5
Pasta
1, 0
0, 1
2, 2
Just for fun (i.e. not on the test) what would happen if my wife got to pick the drink first,
then I got to observe her choice and make a selection?
What if the order was reversed?
3.
More
Left
Middle
Right
Up
1, 2
2,1
0,0
Middle
2, 1
1, 2
0,0
Down
0,0
0,0
1,1
4.
Suppose that an incumbent firm gets to choose whether to compete via Bertrand price
competition or via Quantity Competition.
A potential entrant must choose to enter or
stay out.
Enter
Stay Out
Price Competition
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 Fall '08
 GORDANIER
 Game Theory

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