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Assignment 2

1. The document contains an assignment for a masters-level project management course. The assignment includes solving game theory problems using maximin and minimax principles and determining optimal strategies and values for players in zero-sum games based on given payoff matrices. 2. Students are asked to analyze games between computer manufacturers and banks involving the allocation of salespeople, use dominance rules to reduce a payoff matrix, and formulate a pricing game between two firms as a linear programming problem. 3. The assignment provides context, instructions, and payoff matrices for 6 problems involving concepts in game theory and their application to project management.

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112 views

Assignment 2

1. The document contains an assignment for a masters-level project management course. The assignment includes solving game theory problems using maximin and minimax principles and determining optimal strategies and values for players in zero-sum games based on given payoff matrices. 2. Students are asked to analyze games between computer manufacturers and banks involving the allocation of salespeople, use dominance rules to reduce a payoff matrix, and formulate a pricing game between two firms as a linear programming problem. 3. The assignment provides context, instructions, and payoff matrices for 6 problems involving concepts in game theory and their application to project management.

Uploaded by

natan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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SkillMart International College

Masters in Project Management


Game Theory Application in Project (PMAE 522)
1st Year (2021/2022), Semester II

Assignment 2
Bereket Haile (Ph.D.)
Submission Date: August 4, 2022

1. Solve the following games by using maximin (minimax) principle, whose payoff matrix are given
below: Include in your answer:
(i) strategy selection for each player,
(ii) the value of the game to each player. Does the game have a saddle point?

2. Two computer manufacturers A and B are attempting to sell computer systems to two banks; 1
and 2. Company A has 4 salesmen; company B only has 3 salesmen available. The computer
companies must decide upon how many salesmen to assign to sell computer to each bank. Thus
company A can assign 4 salesmen to bank 1 and none to bank 2 or three to bank 1 and one to
bank 2, etc. Each bank will buy one computer system. The probability that a bank will buy from a
particular computer company is directly related to the number of salesmen calling from that
company, relative to the total salesmen calling. Thus, if company A assigns three salesmen to
bank 1 and company B assigns two salesmen, the odds would be three out of five that bank 1
would purchase company A’s computer system. (If none calls from either company the odds are
one-half for buying either computer.) Let the payoff be the expected number of computer systems
that company A sells. (2 minus this payoff is the expected number company B sells).
a) What strategy would company A use in allocating its salesmen?
b) What strategy should company B use?
c) What is the value of the game to company A?
d) What is the meaning of the value of the game in this problem?
SkillMart International College
Masters in Project Management
Game Theory Application in Project (PMAE 522)
1st Year (2021/2022), Semester II

Assignment 2
Bereket Haile (Ph.D.)
Submission Date: August 4, 2022

3) Use dominance rules to reduce the size of the following payoff matrix to (2 × 2) size and hence, find
the optimal strategies and value of the game.

4) Obtain the strategies for both players and the value of the game for two-person zero-sum game whose
payoff matrix is given as follows:

5) Obtain the optimal strategies for both players and the value of the game for two-person zero-sum
game whose payoff matrix is given as follows:

6) Firm X is fighting for its life against the determination of firm Y to drive it out of the industry. Firm
X has the choice of increasing the price, leaving it unchanged, or lowering it. Firm Y has the same
three options. Firm X’s gross sales in the event of each of the pairs of choices are shown below:

Assuming firm X as the maximizing one, formulate the problem as a linear programming problem

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