ECON 327-3149
Exam 1-Fall 2016
NAME:
QUESTION 1 (50 Points)
Two hunters, players 1 and 2, can each choose to hunt a stag, which provides a rather
large and tasty meal, or hunt a hare, also tasty, but much less filling. Hunting stags is
challenging and req
E327 Game Theory
Homework #3: SOLUTIONS
1. Exercise 67.2 (Bertrands duopoly game with discrete prices) Consider the
variant of Bertrands duopoly game presented in class (section 3.2 of the text) in
which each firm
Brinkmanship
by
Robert A. Becker
Notes for E327, Spring 2013
What is brinkmanship? How is it dierent from a mixed strategy?
Brinkmanship is the deliberate creation of a recognizable risk or war, a risk that one does not
completely control. It is the tacti
SOLUTIONS
E327 Game Theory
Homework #1
1. A decision-makers preferences over the set A=cfw_a, b, c are represented by the
payoff function u for which u(a)=20, u(b)=0, and u(c)=4. Are they also represented
by the
Lecture 5: Mixed strategies
Indiana University,
Emerson Melo
1/
16
1 vNM Payoff Functions
Suppose that a decision-maker has preferences over a set of
outcomes, and that each of her actions results in a lottery
(probability distribution) over these outcom
Lecture 8: Bayesian Equilibrium
Indiana University,
Emerson Melo
1/
25
Recall that in a game of complete information the players
payoff functions are common knowledge.
In a game of incomplete information, in contrast, at least one
player is uncertain ab
Lecture 10: Extensive form
games I (Contd)
Indiana University, November 8, 2016
Emerson Melo
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20
You may think of a players strategy as a plan of what to do,
whatever the other players do, both if the player carries out
her intended actions, and also i
Lecture 7: Bayesian Games
Indiana University,
Emerson Melo
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28
1 Motivation
An assumption underlying the notion of Nash equilibrium is
that each player holds the correct belief about the other
players actions
To do so, a player must know the game she
Lecture 9: Extensive form games
I
Indiana University,
Emerson Melo
1/
11
1 Definition
Normal form games: Simultaneous moves
Sequential moves are ruled out
Many strategic situations have a sequential structure
Extensive form describes the sequential st
Lecture 3: Best response
functions
Indiana University, August 30th, 2016
Emerson Melo
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26
2 Solving games
In order to solve a game we need to find a procedure.
The idea is to define a mathematical object which captures
players incentives.
We will int
Dairy vs. Processor
Subgame Perfection Example
Robert Becker
E327 Spring 2015
1
Reference: Baird, Gertner and Picker, Game Theory and the Law, pp. 69-75.
Two Players - Food Processor (player 1) and a Dairy (player 2);
Case based on General Foods vs. Valle
E327 Game Theory
Assignment 2: Due Monday September 14, 2015 at the BEGINNING of class
1. Consider the following (3x3) strategic game.
Player 2
Middle
Right
Top
5,10
10,5
5,0
Middle
10,5
0,5
2,3
Bottom
Player 1
Left
0,5
0,0
5,10
(a) Find each players best
E327 Game Theory
Assignment 3: Due Wednesday September 23, 2015 at the BEGINNING of class
1. Consider the following (3x3) strategic game.
Player 2
Middle
Right
Top
5,5
1,6
3,5
Middle
6,1
0,0
7,0
Bottom
Player 1
Left
5,3
0,7
2,2
(a) Is this a symmetric gam
Best Response Graphs, II
E327 Spring 2015
R. Becker
1
Best Response Graphs
Apply here to 2x2 games;
Intersections of each players graphs are equilibrium points;
Your job is to verify the graphs shown on the following slides.
Standard setup is to let p = t
Econ 327
Homework 1
Problem 1
Consider the following 2 ! 2 strategic game
Player 1
Player 2
C
2; 2
3; 0
C
D
D
0; 3
1; 1
a) Who are the Players? Player 1 and Player 2
b) What are the actions sets? A1 = fC; Dg ; A2 = fC; Dg
c) Complete the following table o
Game Theory and Information
A little knowledge
is a dangerous thing.
So is a lot.
- Albert Einstein
Signaling Games
A signaling game occurs in a sequential game with private
information
the informed player (player 1 ) takes an action that is observable
Economies 2014, 2, 20-44; doi:10.3390/economies2010020
OPEN ACCESS
economies
ISSN 2227-7099
www.mdpi.com/journal/economies
Article
A Game-Theoretic History of the Cuban Missile Crisis
Frank C. Zagare
Department of Political Science, University at Buffalo
Indiana University Bloomington
Evaluation Essay: The Cuban Missile Crisis
Shuyang Chai
ECON - E327
Robert A. Becker
March 10, 2015
The Cuban Crisis that happened in late October 1962 is the most dangerous moment of the Cold
War, it also the most threateni
Lecture 12: Repeated Games I
Indiana University,
Emerson Melo
1/
19
1 Introduction
Many of the strategic interactions in which we are involved are
ongoing: we repeatedly interact with the same people
In many such interactions we have the opportunity to
Lecture 11: Applications
Indiana University,
Emerson Melo
1/
12
Proposition
The set of subgame perfect equilibria of a finite horizon extensive
game with perfect information is equal to the set of strategy
profiles isolated by the procedure of backward in
Econ 327
Homework 2
Problem 1
True or False (Justify your answer)
a) A Nash equilibrium is always Pareto efficient.
False. For example, consider the Prisoners Dilemma:
Player 1
C
D
Player 2
C
2, 2
3, 0
D
0, 3
1, 1
(D, D) is NE but it is not Pareto efficie
Econ 327
Homework 3
Problem 1
True or False (Justify your answer)
a) In a strict Nash equilibrium, no players equilibrium action is weakly dominated.
True. Let (a1 , a2 ) be a strict NE. By way of contradiction, suppose a1 is weakly
dominated by a1 . Then
Econ 327
Homework 4
Problem 1
True or False (Justify your answer)
a) In the Cournots game, the lower the number of rms the more favorable
the economic outcome is.
a"c
False. In the basic Cournots game, NE for n rms is q ! = n+1
, which implies
n
the aggre
ECON 327 Game Theory
Professor Daniela Puzzello
Sample Exam
Directions: Make sure that you JUSTIFY your answer for all problems if you
want credit.
Problem 1. True or False. (Justify your answer.)
I. An outcome which is Pareto e cient is also a Nash equil
STUDY GUIDE EXAM 1 ECON-327
PROF: EMERSON MELO
Department of Economics, Indiana University, Bloomington, IN 47408, USA. Email: [email protected]
1
2
PROF: EMERSON MELO
(1) Two division managers can invest time and effort in creating a better working
relations
2/3/2015
Cournots model of duopoly:
a single good is produced by two rms
rms select quantities to supply, seek to maximize prot
all output sold at a single price, determined by the demand for the good
and total output
Set of players: N = cfw_1, 2
Playe
Exam 1 Study Guide
Exam 1 will be in class on Thursday, February 12.
Chapters covered on Exam: 1, 2, part of 3
The exam will contain 4 short answer questions, each with multiple parts. The
best way to
STUDY GUIDE EXAM 1 ECON-327
PROF: EMERSON MELO
Department of Economics, Indiana University, Bloomington, IN 47408, USA. Email: [email protected]
1
2
PROF: EMERSON MELO
(1) Two division managers can invest time and effort in creating a better working
relations