Homework Assignment/Exam preparation, due at Lecture I-7

1. What is a strategy? What is a mixed strategy?

complete plan of actions. responce for each possible situation

2. What constitutes a “game”? players, actions (strategies), payoffs

3. Define the following characteristics of a game, in one sentence each. Name, if possible,
examples.
simultaneous vs. sequential
cooperative vs. non-cooperative
finite vs. infinite
symmetric vs. asymmetric
constant-sum vs. non-constant-sum
one-shot vs. repeated
discrete vs. continuous
complete information vs. incomplete information
perfect information vs. imperfect information

4. What does the term “utility payoff” mean? result that playes get, reflects satisfaction, or reward, in quantitative terms, may
be money or other values

5. Which ways do you know to write down a game? normal (matrix), extensive (tree)
stage where noone has an incentive to deviate
6. Define what a Nash equilibrium is. What is a mixed strategy Nash equilibrium?
best of the best NE ?? in each subgame
7. What is a subgame perfect Nash equilibrium?

8. In a complete information game where all players have to make their choice simultaneously,
and every player has to choose one of a limited number of discrete strategies, which ways
best responses in matrix. elimination of strictly dominated strategies
do you know to find Nash equilibria? Which of these equilibria are subgame perfect?

9. In a similar game, only that both players now have to choose a strategy from a continuous
strategy space (like choosing any price p between 0 and infinity), which ways do you know to
find Nash equilibria? game tree, але таке округленьке. find NE mathematically. rollback ??

10. In a game where players make their choice sequentially, and at each node every player has
to choose one of a limited number of discrete strategies, which ways do you know to find
Nash equilibria? With which methods do you find subgame perfect Nash equilibria?
1. best responses for NE. ALL strategies in a matrix (тобто мільярд рядкуів тепер). or dominated strategies elimination
2. extensive form. backward induction.
11. Assume you have a game consisting of two stages. In the first stage, players play a game like
described under 8, and in the second stage they play a different game, also of the type
described under 8. How do you find the subgame perfect equilibria of this two-stage game?
matrix and best responses twice separately ??
12. Find all pure strategy Nash equilibria of the following game:
Player B
Left Right

2 1
Up
1 8
Player A
6 5
Down
0 6
Can you find mixed strategy Nash equilibria for this game? там врешті 5=6 тобто
неможливо розвязати. це
ще що?
13. Find all pure strategy Nash equilibria of the following game:
Player B
Left Right

4 4
Up
5 4
Player A
1 5
Down
1 4
Can you find mixed strategy Nash equilibria for this game? A plays "up" with probability 400% ???

14. Find all pure strategy Nash equilibria of the following game:
Player B
Left Right
3 2
Up
3 15
Player A A: up 12/13
4 16 down 1/13
Down
1 16 B: left 1/3
right 2/3

Can you find mixed strategy Nash equilibria for this game? If you find any mixed strategy
Nash equilibria: what are the (expected) payoffs for both players in these equilibria?

15. Consider the following game:

up ( 0, 4)
2 down
up ( 30 , 5 )
1 up
( 2 , 20 )
down 2 down ( 50 , 19 )
Write down all potential strategies of player 1. Write down all potential strategies of player
2. Using those strategies, write down the normal form of the game, and derive all pure
strategy Nash equilibria.
16. For the same game, derive all subgame perfect Nash equilibria. Write down your chain of
arguments. Interpret your results.
one player offers smth (eg amount of money), another player can accept or reject.
17. Describe the Ultimatum game. What is the subgame perfect Nash equilibrium in this game
I: give the lowest amount. II: accept all that is > 0. II tend to reject unfair offers. I tend to give more (altruism, reputation, fear of rejection
assuming payoff-maximizing rational players? What do we usually observe in experiments
on this game? What explanations (from behavioral economics) do you know which are able
to predict such behavior? відраза до несправеднивості. social preferences. взаємність ??

18. How do we find mixed strategy equilibria in a Normal Form game? це ж на прикладі треба. ні?

19. What is meant by “depth of reasoning”? What is the usual assumption in game theory
regarding this? Is the assumption realistic? What do we observe in the real world?

20. Consider a Prisoner’s Dilemma game like the following, and derive all Nash equilibria in this
game.
+ mixed
Player B
Cooperate Defect
5 6
Cooperate
5 1
Player A
1 2
Defect
6 2

21. In experiments on repeated Prisoner’s Dilemma games, we observe a lot of cooperation in

this game. Name at least two approaches from game theory or behavioral economics which
якщо Т4Т і grim trig - це стратегії, то approaches - це ???
are able to explain this cooperation.
відповіді ChatGPT: Tit-for-Tat Strategy, Reciprocity and Reputation Building, Conditional Strategies (T-4-twoT), Forgiveness and Learning

22. Assume that the game above is repeated (potentially) infinitely, in each round with a
probability of 10% that the game ends after the current round. Name a trigger strategy
which if used by both players constitutes a subgame perfect Nash equilibrium in which both
players cooperate. Show mathematically that this is indeed an equilibrium.

23. In your own words: What does the Folk Theorem for infinitely repeated games state?

24. What is a “focal point”? When is it useful?

25. Which criteria could play a role in an equilibrium selection problem, when a game has
multiple equilibria and players have to coordinate on one?

26. Assume a strategic game where both players have opposite interests. What can you deduct
from communication taking place before choices are made, if sending messages does not
impose any costs? це як з футболом. коли фунболіст каже воротарю, куди битиме. фактично, cheap talks
один хоче координації, анший хоче антикоординації він подумаю, що я подумаю, що він подумає...
без дій все одно що одночасна гра
 cheap talk gives a first mover advantage in any of coordination games
як з пляшками з водою, коли міг обрати к-сть. назва гри ??? ні, тут же навпаки другому краще. що тоді???
27. Find a game in which it is better for one player to move first rather than both players
deciding simultaneously (first mover advantage). Find also a game in which it is better for
one player to move second rather than deciding simultaneously (second mover advantage).
opera houses, бо тоді є шанс підрізати, але не сильніше, ніж треба. і в будь-які на координаці, як от обрати числа. ні, отут-от реально оце з пляшками!!!

28. Come up with a question which you could imagine being asked in the exam.
• The question should be short, but not too simple (you should not have been able to
answer that question before the Game Theory I course).
• It should be possible to give the answer in 1-3 sentences.
• Write down that question.
• If your question involves a game in extensive or normal form, write down the game
on an A4 sheet, and be prepared to draw it in class on the white board.
• Bring the question to next class, and please, for keeping the fun, do not share yet
your question and answer with other students.

Imagine an endless prisoner's dilemma game. name at least 2

strategies that will lead to a Nash equilibrium. Prove mathematically
which of them is better.