Find the pure-strategy nash equilibrium, Game Theory

Assignment Help:

Find the pure-strategy Nash equilibrium

Alice is on vacation in Wonderland and considers trying a special mushroom sold by the caterpillar. She cannot tell upfront if the mushroom is good or bad; she only discovers it later if it gives her a stomach ache. For the caterpillar, it costs more to sell good quality mushroom. The payoffs of Alice and the caterpillar are given in the table below:

1253_Find the pure-strategy Nash equilibrium.png

(a) A pure strategy is a strategy that does not involve randomization. Find the pure-strategy Nash equilibrium/equilibria of this game.

(b) Alice likes Wonderland so she decides to stay there for 10 days: the above game is repeated 10 times. Can you find a trigger strategy that induces Buy/Good for all 10 periods? How about the first 9 days?

(c) Alice falls in love with Wonderland and decides to live there for the rest of her life. The above game is thus repeated infinitely. If the interest rate is zero, explain what trigger strategy will induce the cooperative Buy/Good equilibrium.

(d) Assume now that the interest rate is greater than zero, and the game is repeated infinitely. Find a range of r such that the cooperative equilibrium can be sustained.

(e) It is possible that Alice will have to leave Wonderland and return home eventually. More specifically, each period players think that there is a 30% chance that the game does not continue next period. Is the cooperative equilibrium still possible to maintain? If yes, for what values of the interest rate? If not, why not?

 


Related Discussions:- Find the pure-strategy nash equilibrium

Volunteer''s dilemma , Scenario As described by William Poundstone, imag...

Scenario As described by William Poundstone, imagine that you just notice that electricity has gone out for your entire neighborhood. the electrical company can send somebody to

Three words, if the first three words are "the boy''s down" what are the la...

if the first three words are "the boy''s down" what are the last three words?

Identifying restrictions, In many cases we are interested in only one (or a...

In many cases we are interested in only one (or a few) of the equations of the model and attempts to measure its parameters statistically without a complete knowledge of the entire

Cardinal payoffs, Cardinal payoffs are numbers representing the outcomes of...

Cardinal payoffs are numbers representing the outcomes of a game where the numbers represent some continuum of values, such as money, market share or quantity. Cardinal payoffs per

Evolutionary games, How much time you want to spend on this material willde...

How much time you want to spend on this material willdepend on the focus of your course. For many social sciencecourses, a general exposure to the ideas, based on a quick runthroug

Single unit auction, An auction during which just one item is on the market...

An auction during which just one item is on the market for sale. Procedures embody English, Dutch, and sealed bid auctions. When multiple units are sold in one auction, the auction

Paired prisoners'' dilemma, Paired Prisoners' Dilemma Students can be p...

Paired Prisoners' Dilemma Students can be paired off and instructed to play several ver-sions of a particular game with a prisoners' dilemma structure.Provide each pair with a

Find all ne of the game, 1. Find all NE of the following 2×2 game. Determin...

1. Find all NE of the following 2×2 game. Determine which of the NE are trembling-hand perfect. 2. Consider the following two-person game where player 1 has three strategie

Stag hunt , Scenario The French thinker, Jean Jacques Rousseau, presente...

Scenario The French thinker, Jean Jacques Rousseau, presented the subsequent state of affairs. 2 hunters will either jointly hunt a stag (an adult deer and rather massive meal)

Game playing in class-equilibrium payoffs example, (a) Equilibrium payoffs ...

(a) Equilibrium payoffs are (1, 0). Player A’s equilibrium strategy is S; B’s equilibrium strategy is “t if N.”   For (a): Player A has two strategies: (1) N or (2) S. P

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