HmWk01_Ans - Econ 1200 Spring 2012 Homework#1 Answers 1 a.5...

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Econ 1200 Spring 2012 Homework #1 Answers 1. a. (.5 point) The normal form of the game is: Warden Guards at Wall Regular Inspections Prisoner Climb Wall -1, 1 1, -1 Dig Tunnel 1, -1 -1, 1 The game is zero, or constant sum b. (.5 point) The extensive form version of the simultaneous move game is: c. (.5 point) The mutual best response is to randomize the strategy choices. Prisoner plays Climb Wall with probability .5 and Dig Tunnel with probability .5 and Warden plays Guards at Wall with probability .5 and Regular inspections with probability .5. d. (.5 point) The extensive form version of the sequential move game where the warden is the first mover is
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The rollback/backward induction solution is that if Warden chooses to guard the wall, Prisoner chooses Dig Tunnel and if Warden chooses regular inspections, Prisoner chooses Climb Wall. The solution will be different, as the Prisoner can perfectly condition on the Warden’s behavior and so the Prisoner can always win the game. 2. This game is a Prisoner’s Dilemma. a. (.5 point) Here is one possible parameterization of the game: Rita’s No Rewards Card Rewards Card Bruster’s No Rewards Card 2, 2 0, 3 Rewards Card 3, 0 1, 1 b. (.5 point) Both players have a dominant strategy: offer rewards card.
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