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Game Theory Problem Set 2

This document contains 5 problems related to game theory and Nash equilibria: 1) Find the Nash equilibria for 3 normal-form games. 2) Find the pure-strategy Nash equilibria for a bargaining game where two players split $1. 3) Compute the Nash equilibria for the Rock-Paper-Scissors game. 4) Show that if payoffs differ by positive affine transformations, the Nash equilibria are preserved. 5) Show that eliminating strictly dominated strategies preserves the Nash equilibria.

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Şimal Köseoğlu
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72 views2 pages

Game Theory Problem Set 2

This document contains 5 problems related to game theory and Nash equilibria: 1) Find the Nash equilibria for 3 normal-form games. 2) Find the pure-strategy Nash equilibria for a bargaining game where two players split $1. 3) Compute the Nash equilibria for the Rock-Paper-Scissors game. 4) Show that if payoffs differ by positive affine transformations, the Nash equilibria are preserved. 5) Show that eliminating strictly dominated strategies preserves the Nash equilibria.

Uploaded by

Şimal Köseoğlu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Game Theory

Problem Set 2
1. Find all Nash equilibria of the following normal-form games.

a)
L R
U 3; 4 2; 6
D 0; 3 5; 1

b)
L R
U 4; 5 3; 1
D 4; 0 0; 6

c)
L C R
U 6; 6 1; 2 3; 3
M 2; 1 4; 7 4; 3
D 3; 4 2; 5 3; 9

2. (Divide the dollar) Players 1 and 2 are bargaining over how to split one dollar. Both
players simultaneously name the amounts they would like to have, s1 > 0 and s2 > 0:
If s1 + s2 6 1; then the players receive the amounts they named; if s1 + s2 > 1; then
both players receive zero. Find all pure-strategy Nash equilibria of this game. Are
there equilibria in weakly dominated strategies? Explain.

3. Compute all Nash equilibria of the Rock-Scissors-Paper game.

R S P
R 0; 0 1; 1 1; 1
S 1; 1 0; 0 1; 1
P 1; 1 1; 1 0; 0
~ = (S1 ; : : : ; Sn ; u~1 ; : : : ; u~n ) be two normal-form
4. Let G = (S1 ; : : : ; Sn ; u1 ; : : : ; un ) and G
games with the same number of players and the same set of actions for every player.
Suppose that for every player i = 1; : : : ; n; there exist two numbers Ai > 0 and Bi
such that u~i (s) = Ai ui (s) + Bi for every action pro…le s in S1 : : : Sn : Show that a
strategy pro…le = ( 1 ; : : : ; n ) is a Nash equilibrium of G if and only if is a Nash
equilibrium of G:~

1
5. Suppose that the normal-form game G1 is derived from G = (S1 ; : : : ; Sn ; u1 ; : : : ; un )
by eliminating pure strategies that are strictly dominated in G. Show that a strategy
pro…le ( 1 ; : : : ; n ) is a Nash equilibrium of G if and only if is a Nash equilibrium of
G1 : (NOTE: if Si1 is a subset of Si ; then any probability distribution i in (Si1 ) may be
identi…ed with the probability distribution in (Si ) that gives the same probabilities
as i to the pure strategies in Si1 ; and gives probability 0 to the pure strategies that
are in Si but not in Si1 :)

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