Strategic Behavior
Summer II, 2011.
ECO-5341.
Solution to Exam IV
.
1. (a)
First, consider a pooling equilibrium where both types of the sender choose R. In such an
equilibrium, the receiver must assign probability 0.5 to each node on the right informatio
Strategic Behavior
Summer II, 2011.
Solution to Problem Set 1.
Problem 1.2:
For player 1 (the row player), T dominates B.
After eliminating B, in the reduced 2 3 matrix, we see that for player 2
(column player) R dominates C.
After eliminating C, we are l
Strategic Behavior
Summer II, 2011.
ECO-5341.
Solution to Exam III
.
1. Consider the following normal form game with two players:
L
R
T 1, 1 10, 0
B 0, 10 8, 8
Players discount future payos using a common discount factor (0, 1].
(a) Suppose the game is pl
Strategic Behavior
Summer II, 2011
Solution to Problem Set 2.
Problem 1.11
No player plays a strictly dominated strategy with positive probability.
Strategies T and M for player 1 and L and R for player 2 survive iterated
elimination of dominated strategi
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Homework Assignment 3
Due in class on 09/28/2016
Instructions. This assignment will be due on Wednesday, September 28, 2016 at the beginning of class.
If you cannot make it to class that day,
ECO 5341
Strategic Behavior: Game Theory and Applications to Economics
Department of Economics
Southern Methodist University
Fall 2016
Instructor
Bo Chen
Email: bochen@smu.edu
Tel: 214-768-2715
O ce: Umphrey Lee, 301G
TA
Debdeep Chattopadhyay, debdeep@mai
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Homework Assignment 2
Due in class on 09/21/2016
Instructions. This assignment will be due on Wednesday, September 21, 2016 at the beginning of class.
If you cannot make it to class that day,
ECO 5341 Strategic Behavior Lecture Notes 2
Bo Chen
SMU
Fall 2016
(SMU)
Static Games with Complete Information I
Fall 2016
1 / 36
Terminology and Assumptions
1
Terminology (informal)
Strategies
Choices available to each of the players.
Payos
Numerical rep
ECO 5341 Strategic Behavior Lecture Notes 1
Bo Chen
Southern Methodist University
Fall 2016
(Southern Methodist University)
Introduction to Game Theory
Fall 2016
1 / 18
What is game theory?
Robert J. Aumann, 1985: Briey put, game and economic theory
are c
Strategic Behavior
Summer II, 2011.
ECO-5341.
Solution to Exam 1.
1. Consider the following normal form game with two players:
1 , 2
L
C
R
T 3, 3 7, 2 1, 2
M 2, 7 6, 6 1, 1
B 2, 1 1, 1 0, 0
(a) What are the strategies that survive iterated elimination of
Strategic Behavior
Summer II, 2011.
ECO-5341.
Solution to Exam II
.
1. Consider the following normal form game with two players where players are allowed
to play mixed strategies:
1 , 2
L C
R
T 4, 2 3, 3
0, 1
M 3, 5 4, 4
0, 0
B 1, 0 0, 0 1, 1
Derive a Na
Strategic Behavior
Summer II, 2011.
Solution to Problem Set 3.
Exercise 2.11.
Yes. Note that the one shot game has two Nash equilibria (in pure strategies): (T,L) and (M,C).
Consider the following history dependent strategies for the twice repeated
game:
Strategic Behavior
Summer II, 2011.
Solution to Problem Set 4.
1. Consider the following symmetric static Cournot duopoly game of two-sided incomplete formation. Two rms sell in a homogenous good market where the market demand
is given by
Q = 10 p
where Q
ECO 5341 Strategic Behavior
SMU, Fall 2016
Instructor: Bo Chen
Answer Key to Homework 1
Question 1.
(a) Normal Form:
Set of players: cfw_player1, player2;
Strategy sets:
S1
S2
= fU p; Downg
= fLef t; M iddle Lef t; M iddle Right; Rightg
Payos:
u1 (U p; Le