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A priori knowledge usually enables us to decide that some coefficients must be zero in the particular equation, while they assume non-zero values in other equations of the system. We said that identification of an equation is based on variables not included (not appearing) in it. To be identifiable an equation must be independent of one or more important variables, which are included in other equations of the system. Such excluded variables, if operative during the sample period, will generate shifts in the other equations of the model, which will in turn identify the particular equation from which they are absent (i.e. in which they appear with zero coefficient).
Based on the a priori information a list can be prepared, which should be as complete as possible, of the factors which are relevant to the phenomenon being studied. The list can help us decide which of these factors would normally appear in each relationship. For example, assume that we want to study the demand for an agricultural product. The demand equation belongs to a system of equations describing the market mechanism.
A Nash equilibrium, named when John Nash, may be a set of methods, one for every player, such that no player has incentive to unilaterally amendment her action. Players are in equi
A non-credible threat may be a threat created by a player in a very Sequential Game which might not be within the best interest for the player to hold out. The hope is that the thr
How do I eliminate weakly dominated strategy
1. This question and the next is based on the following description. Consider the coalitional game (referred to as Game 1) given by: N = {1,2,3,4}; v(N) = 3, v{i} = 0, i = 1,...,4,
Combining Simultaneous and Sequential Moves The material in this chapter covers a variety of issues that require some knowledge of the analysis of both sequential- move
A participant in a very game who selects from among her methods randomly, primarily based on some predetermined chance distribution, instead of strategically, primarily based on pa
Matches or different objects are organized in 2 or a lot of piles. Players alternate removing some or all of the matches from anyone pile. The player to get rid of the last match w
The following is a payoff matrix for a non-cooperative simultaneous move game between 2 players. The payoffs are in the order (Player 1; Player 2): What is the Dominant Strat
(a) A player wins if she takes the total to 100 and additions of any value from 1 through 10 are allowed. Thus, if you take the sum to 89, you are guaran- teed to win; your oppone
What is Game Theory?
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