Name Surname: ECON201-C Spring 2023

Student ID: Sabanci University

EXAM-1
• Please write your name on top of each page.

• Please write your answers clearly on a white piece of paper.

• Please clearly state the answer you choose for the multiple-choice questions.
You do not need to give an explanation.
• Please place your id card while taking photos of your answers.
• You have 120 minutes to answer questions. You will have an extra 5 minutes at
the end of the exam for you to upload your solutions.
• I, hereby, declare that during the final examination of ECON 201 –Spring 2023, I
have not received, I have not given, nor will I give or receive, any assistance
from/to another party and/or student taking this examination, including discussing
and/or corresponding (over conventional and online media) about the examination
with fellow students and other parties. I will not use any sources including lecture
notes, online material, written notes, and textbooks. I understand that acts of
academic dishonesty may be penalized to the full extent allowed by Sabancı
University, including receiving a failing grade for the course and facing further
disciplinary actions.

• Academic dishonesty will not be tolerated.

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Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 1 (10 pts)

What is a Game in Strategic Form? Give a complete definition. (10 pts)

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Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 2 (20 pts)

Consider the three player-game shown in the table below, where each entry (for ex-
ample, (7,3,4)) gives the payoffs of Player 1, Player 2, and Player 3 respectively.

2.1) Is (U,R,A) a Nash Equilibrium?

2.2) Is (D,L,B) a Nash Equilibrium?

2.3) Does D dominate U for Player 1?

2.4) Does D dominate C for Player 1?

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Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 3 (20 pts)

3.1) 3 players P1, P2, P3 each simultaneously choose a location at which
to open a shop on a street that goes from Location 0 to Location 1.
Consumers are uniformly distributed along this street and each consumer
will go to the nearest shop. (Assume that ties are broken with equal
probability in case there is more than one nearest shop.) Let x, y, z
denote the locations chosen by P1, P2, P3 respectively. Choose those
statements below which are TRUE for this game. (No explanation is
needed)

1) (x, y, z) = (0, ) is a Nash equilibrium

2) (x, y, z) = (, ) is a Nash equilibrium

3) (x, y, z) = (, ) is a Nash equilibrium

4) (x, y, z) = (, ) is a Nash equilibrium

5) There is no (x, y, z) that is a Nash Equilibrium

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 Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

3.2) 4 players P1, P2, P3, P4 each simultaneously choose a location at which
to open a shop on a street that goes from Location 0 to Location 1.
Consumers are uniformly distributed along this street and each consumer
will go to the nearest shop. (Assume that ties are broken with equal
probability in case there is more than one nearest shop.) Let x, y, z,
w denote the locations chosen by P1, P2, P3, P4 respectively. Choose
those statements below which are TRUE for this game. (No
explanation is needed)

1) x, y, z, w) = ( 0, ) is a Nash equilibrium
2) (x, y, z, w) = (, , ) is a Nash equilibrium

3) (x, y, z, w) = (, , ) is a Nash equilibrium

4) (x, y, z, w) = (, , ) is a Nash equilibrium

5) There is no (x, y, z, w) that is a Nash Equilibrium

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 Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 4 (20 pts)

4.1) In the two-player constant sum game shown below, the payoff x has
such a value that the game has a Mixed Strategy Nash Equilibrium,
where the row player’s strategy is (U, 2/5; D, 3/5) and the column
player’s strategy is (L, q1; M, q2; R, q3). What is the value x? (Show
your work)

4.2) In the two-player constant sum game shown above, the payoff x has
such a value that the game has a Mixed Strategy Nash Equilibrium,
where the row player’s strategy is (U, 2/5; D, 3/5) and the column
player’s strategy is (L, q1; M, q2; R, q3). What is the value q1?
(Show your work)

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Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 5 (10 pts)

5.1) Consider a two-player Game in Strategic Form which has a SO-

LUTION OUTCOME according to one of the solution concepts stated
below. Choose the ones below which require neither player to have
knowledge about the other player’s payoffs.
(A) Dominant Strategy Equilibrium

(B) Iteratively Dominant Strategy Equilibrium

(C) Pure Strategy Nash Equilibrium

(D) Mixed Strategy Nash Equilibrium

5.2) Consider a two-player Game in Strategic Form which has a SO-

LUTION OUTCOME according to one of the solution concepts stated
below. Choose each of those below which require payoffs to be
CARDINAL.

(A) Dominant Strategy Equilibrium

(B) Iteratively Dominant Strategy Equilibrium

(C) Pure Strategy Nash Equilibrium

(D) Mixed Strategy Nash Equilibrium

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Name Surname: ECON201-C Spring 2023
Student ID: Sabanci University

Question 6 (20 pts)

Consider the following two-player game: Initially P1 chooses a or b. If
P1 chooses b then the game ends and P1 gets 2, P2 gets 0. Otherwise P2
chooses L or R. If P2 chooses R then the game ends and P1 gets 3, P2
gets 2. Otherwise P1 chooses c or d and the game ends. If P1 chooses c
then P1 gets 1, P2 gets 3. If P1 chooses d then P1 gets 0, P2 gets 1.

6.1) Give the set of all strategies for P1.

6.2) Give the set of all strategies for P2.

6.3) List every Nash Equilibrium that this game has.

6.4) List every Subgame Perfect Nash Equilibrium that this game has.