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ECON 398  Strategy  University Of Michigan Study Resources

Econ398_HW2Solutions
School: University Of Michigan
Course: Strategy
Econ 398 Homework 2 Sketchy Solutions 1. There are four Nash Equilibria; each one involves one of the four writing down $3, while the other three each write down $10. Notice that in a strategy profile where two players, say Alice and Bertha, write do

Strategy5Handout
School: University Of Michigan
Course: Strategy
9/15/2008 Finding Nash Equilibria We'd like a method for finding NE Player 2 1 A Player 1 B C D 5,7 2,6 3,9 0,0 2 6,4 15 , 3 2,6 0,1 3 11 , 12 1,0 19 , 9 9 , 17 4 8 , 22 7,2 6,5 17 , 12 Example Attributed to A.W. Tucker Two Prisoner's brought in for inter

Strategy18Handout
School: University Of Michigan
Course: Strategy
11/11/2008 Bayes Rule Bayes Rule A B A B Universe of Possibility P[A&B] = P[BA]P[A] = P[AB]P[B] P[BA] = P[AB]P[B] / P[A] Bayes' Rule Bayes' Rule P[BA] = P[AB]P[B] / P[A] = P[AB]P[B] / (P[AB]P[B] + P[AB]P[B] ) Bayes Rule Consider testing for a pa

Strategy19Handout
School: University Of Michigan
Course: Strategy
11/13/2008 Strategic Moves Change the rules of the game to benefit yourself Usually involves making a pregame move 1st Actions must be Observable Irreversible Strategic Moves Strategic moves are to deter or compel Unconditional commitments Try to change

Strategy20Handout
School: University Of Michigan
Course: Strategy
11/20/2008 The Entry Game (200,100) Fight Burning Money I E Challenger F A (200, 100) (100, 100) INCUMBENT SO Don t Don't Invest Acquiesce (0, (0 300) (100,100) Incumbent I Invest E A Challenger (100, 0) F (200, 10) CHALLENGER Enter Stay Out (0,300)

Strategy21Handout
School: University Of Michigan
Course: Strategy
11/20/2008 The Prisoner's Dilemma It's so famous, the payoffs have names! T>R>P>S Clyde Barrow Cooperate Bonnie Parker Cooperate Defect R,R T,S Defect S,T P, P Finitely Repeated Prisoner's Dilemma Clyde Barrow Cooperate Bonnie Parker Cooperate Defect 3,3

Strategy22Handout
School: University Of Michigan
Course: Strategy
12/2/2008 Collective Action Problems Often, the welfare of society is best served if individuals take a particular "socially responsible" action. On the other hand, individuals may not find it in their interest to take the "socially socially responsible"

Strategy23Handout
School: University Of Michigan
Course: Strategy
12/2/2008 Collective Action Games N = population n = # of participants who take an action Nn = # of shirkers who do not take the action Participant g p gets: p( ) p(n) Shirker gets: s(n) Collective Action Games Suppose there are n participants and Nn1

Strategy24Handout
School: University Of Michigan
Course: Strategy
12/4/2008 Evolutionary Game Theory Darwin's Origin of Species explained evolution of organisms Certain members of a species are better adapted to their environment (more fit) The traits that make those members more fit are embedded in genes More fit membe

ch11_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 11 Exercises SOLVED EXERCISES S1. False. The players are not assured that they will reach the cooperative outcome. Rollback reasoning shows that the subgameperfect equilibrium of a finitely played repeated prisoners dilemma will enta

ch12_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 12 Exercises SOLVED EXERCISES S1. (a) (b) The number choosing X should decrease to move the population division between X and Because the line for action X is above the line for action Y when 100 people choose X, Y away from the unsta

ch13_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 13 Exercises SOLVED EXERCISES S1. (a) The payoff table for the two types of travelers is: High High Low 100, 100 70, 30 Low 30, 70 50, 50 (b) The graph is: (c) There are three possible equilibria: a stable monomorphic equilibrium of a

ch14_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 14 Exercises SOLVED EXERCISES S1. Some examples of incentive schemes that help induce more care on the part of policy holders: 1. The insurer can provide a multiyear contract or otherwise establishes an ongoing relationship in which f

Strategy17Handout
School: University Of Michigan
Course: Strategy
11/10/2008 Spence: Education as a Screen Education does not affect productivity Two types of people Able types worth $150,000 Challenged types worth $100,000 $100 000 Types are indistinguishable, can't be tested Spence: Education as a Screen SelfSelectin

Strategy16Handout
School: University Of Michigan
Course: Strategy
10/30/2008 Midterm 2: Next Tuesday Exam focuses on new material Chapter 5 to beginning of Chapter 9 Lectures 816, HW 46 Signaling with Strategic Uncertainty Otto Stag Ludwig Stag Hare 2,2 1,0 Hare 0,1 1,1 Come early and bring a UMID No cellphones or ip

Strategy14Handout
School: University Of Michigan
Course: Strategy
10/23/2008 Your Choice of Gambles A1= A2= .2 .8 .8 .2 $4000 $0 $4000 $0 Your Choice of Gambles $3000 $0 $3000 $0 B1= B2= .25 .75 1 0 A1= A2= .2 .8 .8 .2 $4000 $0 $4000 $0 B1= B2= $0 .25 .75 1 0 $3000 $0 $3000 $0 .75 It turns out that if you preferred A1 t

Strategy6Handout
School: University Of Michigan
Course: Strategy
9/18/2008 MAXIMIN MINIMAX 9 soldiers, three are 5 feet tall, three are 6 feet tall, three are 7 feet tall 5 7 6 6 5 7 7 6 5 Min = 5 Min = 5 Min = 5 A Note About Equilibria Some games Get feel for what an equilibrium might be Show that if everyone does it

Strategy7Handout
School: University Of Michigan
Course: Strategy
9/23/2008 Imperfect Competition We consider competition in a market with a linear demand curve: Q = D( P) = 302 P Inverse demand: P = 302 Q First think of a monopolist with cost C (Q) = 2Q Monopolist seeks to maximize profit: Imperfect Competition: Courno

Strategy8Handout
School: University Of Michigan
Course: Strategy
9/24/2008 Upheaval in Financial Markets A panel of distinguished alumni from the Department of Economics will discuss the ongoing crisis in financial markets. Speakers include: David Berson MPP `79; PhD `82 econ D id B Peter Borish, P t B i h AB `81; MPP

Strategy9Handout
School: University Of Michigan
Course: Strategy
10/1/2008 Simultaneous/Sequential Mix Up We might wish to model situations involving both sequential and simultaneous moves We can combine the concepts of Nash Equilibrium with Rollback to analyze such q y games Consider a somewhat complex relationship be

Strategy10Handout
School: University Of Michigan
Course: Strategy
10/2/2008 Midterm 1: Next Tuesday Covers up through Chpt. 5 & HW 3 Come early and bring a UMID No cellphones or ipods allowed Calculators must be simple nongraphing simple, nongraphing, noncomplex, noncomputerlike calculators with one memory registe

Strategy11Handout
School: University Of Michigan
Course: Strategy
10/9/2008 Mixed Strategies Matching Pennies In Matching Pennies, we found there was no Nash Equilibrium Guildenstern Heads Rosencrantz Heads Tails 1, 1 1, 1 Tails 1, 1 1,1 Why Mixed Strategies? If you were to play the same opponent repeatedly, you wou

Strategy12Handout
School: University Of Michigan
Course: Strategy
10/14/2008 Mixed Strategies Matching Pennies We denote the strategies on the game bimatrix Guildenstern q Heads Rosencrantz R t p 1p Heads H d Tails 1 , 1 1 1 , 1 1q Tails 1 , 1 1 1 , 1 Preferences Involving Gambles We revisit our description of pa

Strategy1Handout
School: University Of Michigan
Course: Strategy
9/10/2008 Personnel for Econ 398: Strategy Econ 398: Strategy A Study of Strategic Interaction in Games Chris Proulx Lorch Hall M107 rabbit@umich.edu Office Hours: Tu, Th 10:3011:30 Instructor: Chris Proulx, rabbit@umich.edu Office Hours: TuTh 10:3011:3

Strategy2Handout
School: University Of Michigan
Course: Strategy
9/10/2008 Analyzing Games We need three things to specify a game Players Possible strategies for each player Payoffs for eac p aye o e ou co es ayo s o each player over outcomes Analyzing Games Players have welldefined and wellbehaved preferences over o

Strategy15Handout
School: University Of Michigan
Course: Strategy
10/29/2008 Expert Advice We often rely on professionals to diagnose problems and recommend and carry out fixes Doctors Auto Mechanics and Repair Technicians p Lawyers Financial Advisors and Real Estate Agents Teachers and Researchers Expert Advice A custo

Strategy13Handout
School: University Of Michigan
Course: Strategy
10/16/2008 Mixed Strategies Matching Pennies We denote the strategies on the game bimatrix Guildenstern q Heads Rosencrantz R t p 1p Heads H d Tails 1 , 1 1 1 , 1 1q Tails 1 , 1 1 1 , 1 Mixed Strategies Matching Pennies Rosencrantz's & Guildenstern

ch15_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 15 Exercises SOLVED EXERCISES S1. (a) In the purethreat case, the unions expected payoff is 50(1 p) 100p = 50 150p. The unions expected payoff goes to zero for p = 1/3 and is negative for p > 1/3. Thus the pure threat is too big from

ch16_solutions_solved edit
School: University Of Michigan
Course: Strategy
Solutions to Chapter 16 Exercises SOLVED EXERCISES S1. Under truthful voting, A should match Geology and Sociology in the first vote, with the winner (Geology) to face Philosophy in the second round. Under strategic voting, A should match Philosophy and S

CFFM8_CHAPTERMODEL_ch04_FinAnalysis
School: University Of Michigan
Course: STRATEGY
1 2 3 4 A B 04 Chapter model C D E F G H I 10/18/13 Chapter 4. Analysis of Financial Statements 5 This model is STRICTLY OPTIONAL. Neither students nor instructors need to go through it. However, if someone wants to practice with Excel, then the model can