Draw the strategic form game, Macroeconomics

Assignment Help:

Consider a two-player game where player A chooses "Up," or "Down" and player B chooses "Left," "Center," or "Right". Their player is as follows: When player A chooses "Up" and player B chooses "Left" player A gets $5 while player B gets $2. When player A chooses "Up" and player B chooses "Center" they get $6 and $1 correspondingly, while when player A chooses "Up" and player B chooses "Right" player A gets $7 while player B gets $3. Moreover, when player A chooses "Down" and player B chooses "Left" they get $6 and $2, while when player A chooses "Down" and player B chooses "Center" they both get $1. Finally, when player A chooses "Down" and player B chooses "Right" player A loses $1 and player B gets $1. Assume that the players decide simultaneously (or, in general, when one makes his decision does not know what the other player has chosen).

(a) Draw the strategic form game.

(b) Is there any dominant strategy for any of the players? Justify your answer.

(c) Is there any Nash equilibrium in pure strategies? Justify your answer fully and discuss your result.

When an action is never chosen by a player it is because this action is DOMINATED by another action (or by a combination of other actions). Dominated strategies are assigned a probability of 0 in any Nash Equilibrium in mixed strategies. Given this observation answer the following parts of this problem:

(d) Find the best response functions and the mixed strategies Nash Equilibrium if each player randomizes over his actions.

(e) Show graphically the best responses and the Nash Equilibria (in pure and in mixed strategies).

 


Related Discussions:- Draw the strategic form game

Trade unions, what reasons limit the bargaining power of trade union in dev...

what reasons limit the bargaining power of trade union in developing countries

What are the responsibilities of central banks, What are the Responsibiliti...

What are the Responsibilities of central banks Responsibilities include providing banking services to commercial banks and the government and regulating financial markets and i

Indiana toll road at the rate of two per minute, Automobiles arrive at the ...

Automobiles arrive at the Elkhart exit of the Indiana Toll Road at the rate of two per minute. The distribution of arrivals approximates a Poisson distribution. A) What is the prob

Theory of aggregate demand, unplandned change in inventory are coutned as i...

unplandned change in inventory are coutned as investment spending by firms

Circular flow – circulation of goods, Figure below demonstrates a more deve...

Figure below demonstrates a more developed version of the circular flow. In this figure we see how goods flow through various sectors of the economy. Figure Money in the c

One least-cost way to make wooden boxes, There is only one least-cost way t...

There is only one least-cost way to make wooden boxes for shipping tomatoes, and any firm that makes them has a cost function given by 2 TC q q = + + 200 .005 .The inverse market d

Wall street journal article, 1. An innovator, who creates new products and ...

1. An innovator, who creates new products and new ways to get business done, is referred to as: Select one: a. A manager. b. A capitalist. c. An entrepreneur. d. A creditor. 2

Estimate the mean value, Cornell University conducted a study of wage diffe...

Cornell University conducted a study of wage differentials between men and women reported that one reason that men's wages are higher is that men tend to have more years of work ex

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd