Game Theory Solutions to Practice Problems - Department of Economics University of California Davis Ecn 200C Game Theory Professor Giacomo Bonanno

Game Theory Solutions to Practice Problems - Department of...

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Page 1 of 5 Department of Economics, University of California, Davis Ecn 200C - Game Theory - Professor Giacomo Bonanno ANSWERS TO PRACTICE PROBLEMS 1 1. (a) Your ranking of the outcomes is (using an ordinal utility function with values 1, 2, 3 and 4: the higher the utility the better the outcome): No kill Kill Your Pay 3 1 ranking No pay 4 2 The dognapper has the following ranking Ranking of No kill Kill Nice Pay 4 3 Freelance No pay 2 1 Ranking of No kill Kill Nasty Pay 3 4 Freelance No pay 1 2 Ranking of No kill Kill Professional Pay 4 2 Dognapper No pay 1 3
Page 2 of 5 Thus you are playing one of the following games: Not Kill Kill Nice Freelance dognapper 2 1 3 4 Not Kill Kill Nasty Freelance dognapper 1 2 4 3 Y O U Pay Not Pay Y O U Pay Not Pay Not Kill Kill Professional dognapper 1 3 2 4 Y O U Pay Not Pay 3 , 1 , 4 , 2 , 3 , 1 , 4 , 2 , 3 , 1 , 4 , 2 , (b) Now let’s see the ranking of the police. No kill Kill Ranking of Pay 2 1 Police No pay 4 3 Thus if you call the police one of the following games will be played: Not Kill Kill