problem set3 solution

# Game a give easy test give hard test study 02 51

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Unformatted text preview: Give Easy Test Give Hard Test Study 0,2 5,1 Slack Off 1,1 -5,0 Disclaimer: Game a does not describe accurately the payoffs in ECON 302. i) An outcome is Pareto efficient if no one can be made better off without making someone else worse off. In this game, there are two Pareto efficient outcomes. The first one is (Study, Hard Test), because any other outcome would make the row player strictly worse off. The second is (Study, Easy Test), because any other outcome would make the column player strictly worse off. ii) Yes. Note that Hard Test is strictly dominated by Easy Test, so the former can be taken out. Then Slack dominates Study. So, solution is (Slack, Easy Test). iii) Pure strategy NE: (Slack, Easy Test); the two strategies are mutual best responses to each other. Our answer in part (i) also confirms this result. Game b Post Risqué Picture Not Post Risqué Picture Check Child’s Facebook Profile -5,1 -1,3 Ignore Child’s Facebook Profile 5,0 0,4 i) There are two Pareto efficient outcomes: (Post, Ignore) and (Not Post, Ignore). Any...
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## This homework help was uploaded on 03/17/2014 for the course ECON 302 taught by Professor Shihenlu during the Fall '13 term at Simon Fraser.

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