Teoria Microecon
omica II
Problem Set 1
Due date: March 5, 2013
Problem 1. Suppose that si is never a best response for player i. Consider now a mixed strategy i for player i such
that i (si ) > 0. Can the play of i ever be justified? In other words, is t

Teoria Microecon
omica II
Problem Set 2
Due date: March 18, 2013
Problem 1. Consider a duopoly game in which two firms simultaneously and independently select (non-negative) prices.
Let p1 be firm 1s price and p2 be firm 2s price. The firms products are d

Teoria Microecon
omica II
Problem Set 3
Due date: 29/04
Problem 1. Consider the ultimatum (bargaining) game discussed in class and suppose that player is payoff function is
ui (x1 , x2 ) = xi i |x1 x2 |,
where 1 and 2 are positive numbers and xi [0, 1] is

Teoria Microecon
omica II
Problem Set 4
Due date: 06/05
Problem 1. Imagine a market setting with three firms. Firms 2 and 3 are already operating as monopolists in two
different industries (they are not competitors). Firm 1 must decide whether to enter fi

Teoria Microecon
omica II
Problem Set 5
Due date: 10/06
Problem 1. Consider the infinitely repeated game with stage game described by the following matrix of payoffs:
C
D
C
3,2
7,0
D
0,1
2,1
(i ) Under what conditions is there a subgame perfect equilibriu

Teoria Microecon
omica II
Problem Set 6
Due date: 21/06
Problem 1. Exercise 4.2 in Chapter 4 of Gibbons.
Solution. Let 1 = (pL , pM , 1 pL pM ) denote the strategy for player 1 in which he plays L with probability pL , plays
M with probability pM , and pl