Name:.
ECO 5341 (Section 1) Spring 2016
Midterm
March 22nd Tuesday Total Points: 100
For full credit, please be formal, precise and tidy. If your answer is illegible and not well
organized and/or if your arguments are informal and imprecise, you will lose
ECO 5341 Stackelberg Model of Duopoly
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Stackelberg
Stackelberg Model of Duopoly
Stackelberg Duopoly
Suppose that two firms (Firm 1 and Firm 2) face an industry
demand
P = 150 Q
where
Q = q1 + q2
is the total indu
ECO 5341 Signaling Games and Perfect Bayesian
Equilibria (PBE)
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Signaling Games
Signaling Games and Perfect Bayesian Equilibrium (PBE)
(0,0)
Fight
Fight
P2
(2,1)
Quiche Type S
Beer
0.8
Strong
Retreat
(1,0)
P2
Ret
ECO 5341: Strategic Behavior
Problem Set 1: Solutions
1
The Saga of Big Monkey and Little Monkey
Big Monkey (BM) and Little Monkey (LM) live on a deserted island in the South Pacic. Their
normal diet consists of berries from ground-level bushes, but an im
ECO 5341 Strategic Behavior
SMU, Fall 2015
Instructor: Bo Chen
Homework Assignment 6
Due in class on 11/11/2015
Instructions. This assignment will be due on Wednesday, November 04, 2015 at the beginning of class.
If you cannot make it to class that day, t
1. Assume the following model of the economy, with the price level fixed at 1.0:
C = 0.8(Y T)
T = 1,000
Y=C+I+G
I = 800 20r
G = 1,000
Ms = 1,200
Ms/P = Md/P = 0.4Y 40r
a) Write a numerical formula for the IS curve, showing Y as a function of r alone.
(Hin
Dynamic Games
Overview
In this unit we study:
Combinations of sequential and simultaneous
games
Solutions to these types of games
Repeated games
How to use dynamics to build self-sustaining
agreements
Sequential and Simultaneous Games
There are many
ECO 5341 Strategic Behavior
Southern Methodist University, Fall 2015
Instructor: Bo Chen
Answer Key to Homework 5
Question 1.
(a) The complete extensive form can be represented as follows (Crepresents
continue and S represents stop for simplicity, here th
Lecture 8: Game Theory (homework solutions)
Julia Collins
13th November 2013
The pirate problem
There are ve pirates, labelled 1 to 5 with Pirate 5 being the most senior. Pirate 5 has 100
gold coins. He can choose to share some of it with the others. If a
MA3600/2014-2015-solution
4. (a) Provide denitions for the following terms:
Normal form game.
A N player normal form game consists of:
A nite set of N players;
Strategy spaces for the players: S1 , S2 , S3 , . . . SN ;
Payo functions for the players:
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Homework Assignment 5
Due in class on 10/26/2016
Instructions. This assignment will be due on October 26, 2016 at the beginning of class. If you cannot
make it to class that day, then you must
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Homework Assignment 4
Due in class on 10/19/2016
Instructions. This assignment will be due on Wednesday, Oct. 19, 2016 at the beginning of class. If
you cannot make it to class that day, then
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Answer Key to Homework 2
Question 1. Nash Equilibrium and Weak Dominance.
Part I. A 2 2 example that satises the requirement in the question is the
following:
L
R
U 0,4 2,4
D 1,1 2,0
There are
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Answer Key to Homework 3
Question 1. (A Price Competition Duopoly Game)
A Nash equilibrium in this game is a prole of prices for the two rms, p1 and
p2 such that p1 is a best response to p2 fo
Practice Exam for Midterm
(Wednesday, 10/05/16, 6:30pm - 9:20pm (Umphrey Lee 0242)
ECO 5341 Strategic Behavior
Fall 2016
Southern Methodist University
Instructor: Dr. Bo Chen
Instructions. This exam consists of
questions, with the weight of each question
CISB 5397: STARTING A BUSINESS
Fall 2016 Case 1
ATOM ENERGY, Inc.
Business Overview
As you know, Texas has de-regulated its electricity markets to create competition and lower costs to the
consumer. The electricity value-chain runs from generation to tran
ECO5341 Strategic Behavior Lecture Notes 5
Mixed Strategy and Mixed NE
Bo Chen
SMU
Spring, 2016
(SMU)
Lecture Notes 5
Spring, 2016
1 / 19
Mixed Strategies and Mixed-Strategy Nash Equilibrium
An Introduction
For some simultaneous-move games, there is no p
Name:.
ECO 5341
Spring 2016
Homework 6 Solutions
Due April 26th Tuesday
Total Points: 100
This homework assignment will only be accepted if the answers are provided on the
space following each question. Treat this assignment like an exam. Write your
answe
ECO 5341 Static Bayesian Games
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Static Bayesian Games
Static Bayesian Games
Consider the following Battle-of-the-Sexes game with
incomplete information. Player 2 is one of two possible types:
L and H. Type L love
ECO 5341
Spring 2016
Sample for Final
Question 1 Consider the following PrisonersDilemma
D C
D 1,1 3,0
C 0,3 2,2
Suppose the above stage game played innitely. Each player has a discount factor 2
(0, 1). Consider the following grim-trigger strategy
Play C
ECO 5341 Wages and Employment in a Unionized
Firm
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Wages and Employment
Wages and Employment in a Unionized Firm
Wages and Employment in a Unionized Firm
Consider a monopolist firm in a product market. The firm
f
ECO 5341 Static Bayesian Games (Hawk and
Dove)
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Bayesian Hawk and Dove
Static Bayesian Games
Consider the following Hawk and Dove game with incomplete
information. Player 2 is one of two possible types: W (eak)
a
ECO 5341 Cournot Competition under
Asymmetric Information
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Cournot under Asymmetric Information
Cournot under Asymmetric Information
Suppose that two firms (Firm 1 and Firm 2) face an industry
demand
P = 150 Q
wh
ECO 5341 Sequential Bargaining
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Sequential Bargaining
Sequential Bargaining
Three Period Sequential Bargaining
Player 1 (P1) and Player 2 (P2) are bargaining over one dollar.
They alternate in making offers. Firs
Example 1: Finding Mixed Strategy Nash Equilibrium
Find all the pure and mixed strategy equilibria of the following game by
constructing the best response correspondences of the players:
T
B
L
2, 1
1, 2
R
0, 2
3, 0
Answer: First let us consider best respo
ECO 5341 Price Competition with Differentiated
Products
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Price Competition
Price Competition
Price Competition with Differentiated Products
Suppose two firms produce differentiated products at a unit
cost c = 0.
ECO 5341 Elections and Voting
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Elections and Voting
Elections and Voting
Elections and Voting
Consider a population of voters uniformly distributed along
the ideological spectrum from left (x = 0) to right (x = 1
1
Sales Revenue versus Profit Maximization
Suppose that two firms (Firm 1 and Firm 2) face an industry demand
P = 150 Q
where
Q = q1 + q2
is the total industry output. Both firms have the same unit production cost c = 30. The
firms are competing by simult
ECO 5341 Signaling Games: Another Example
Saltuk Ozerturk (SMU)
Saltuk Ozerturk (SMU)
Signaling Games
Signaling Games and Perfect Bayesian Equilibrium (PBE)
(1,3)
Up
Up
P2
Left
Type 1
Right
P2
0.5
(4,0)
(2,1)
Down
Down
(0,0)
NATURE
(2,4)
0.5
Up
Up
(1,0)
P