Game Theory by Prof. Kim
1
We focus on games where:
There are at least two rational players
Each player has more than one choices
The outcome depends on the strategies chosen by all players;
there is strategic interaction and payoff interdependence.
Exa
Dynamic Games of
Complete Information
1. Extensive Form (Game Tree) and Information Set (Ch. 2, 14)
2. Strategy (Ch. 3)
3. Subgame, Empty threat, Chain store paradox, Backward Induction,
Subgame Perfect Nash Equilibrium (SPNE) (Ch. 15)
1
Dynamic (or seque
Solution to Exercises for Games of Incomplete Information
1. Chapter 19-6 (p.227)
2. Chapter 22-1 (p.271)
3. Chapter 22-7 (p.273)
4. Chapter 24 Guided Exercise (p.295)
4-1. Chapter 28-1 (p.345) asks to find a PBE in this game.
5. Chapter 24-4 (p.297).
5-1
EC4813/2803 Game Theory
BYUNG-CHEOL KIM
Summer 2012
Problem Set 4
Show your work and carefully make your answers. The due for this problem set is July, 24(Tue).
1.
2.
1
EC4813/2803 Game Theory
BYUNG-CHEOL KIM
Summer 2012
3.
Then, find the Bayesian Nash Eq
EC4813/2803 Game Theory
BYUNG-CHEOL KIM
Summer 2012
Problem Set 3
Show your work and carefully make your answers. This problem set will not be collected for
your grade. Instead, we will work together on these problems in the class. Please try the
followin
EC4813/2803 Game Theory
BYUNG-CHEOL KIM
Summer 2012
Solution to Problem Set 2
1.
1
2. Draw the normal-form matrix of each of the following extensive-form games.
2
3
3. (a)
(b)
4
4.
5.
5
6.
6
7.
7
8.
(I, C, X)
8
Supplementary Notes for
SPNE
Backward Induction
Application: Bank-run game
1
Existence of subgame-perfect Nash
equilibrium
n Every finite dynamic game of complete and
perfect information has a subgame-perfect
Nash equilibrium that can be found by
backward