Scribd
Upload
9 views4 pages

MIT14 126S16 ProblemSet 2

The document contains a problem set for a game theory course, consisting of six questions that explore various concepts such as email games, repeated games, Nash equilibria, and bargaining games. Each question requires analysis and proofs related to game strategies and outcomes. The problems address both theoretical aspects and practical examples in game theory scenarios.

Uploaded by

maggiechu215
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
9 views4 pages

MIT14 126S16 ProblemSet 2

The document contains a problem set for a game theory course, consisting of six questions that explore various concepts such as email games, repeated games, Nash equilibria, and bargaining games. Each question requires analysis and proofs related to game strategies and outcomes. The problems address both theoretical aspects and practical examples in game theory scenarios.

Uploaded by

maggiechu215
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

14.

126 GAME THEORY

PROBLEM SET 2

MIHAI MANEA

Question 1
Consider the complete information game

α β
α θ, θ θ − c, 0
β 0, θ − c 0, 0

where c > 0 and θ is equal to some known value θˆ ∈ (0, c/2). Imagine now an email
game scenario in which there are two possible values of θ, namely θˆ and θ0 , with some prior
probabilities p and 1 − p. Player 1 knows the value of θ, and if θ = θˆ then the email exchange
takes place, where each email is lost with probability ε ∈ (0, 1). If θ = θ0 then no emails
are exchanged. For each action a ∈ {α, β}, find the range of ε for which there is some email
game (i.e. some choice of θ0 and p) in which a is the unique rationalizable action for each
type. Briefly discuss your finding.

Question 2
Let G = (N, A, u) be a finite normal-form game. Suppose the players N play an infinite
repetition of G, but instead of discounting, players care only about the maximum of the per-
period payoffs. That is, in each period t = 0, 1, 2, . . ., the stage game G is played, with each
player having observed the action profile chosen at every previous period. This gives rise
to an infinite history of action profiles (a0 , a1 , a2 , . . .) (which may be random, if the players
are mixing). For each realization of such a history, player i’s payoff in the repeated game is

Date: March 9, 2016.

1
2 MIHAI MANEA

defined to be maxt≥0 ui (at ). Prove that (a) this repeated game is in general not continuous
at infinity, but (b) the single-deviation principle still holds.

Question 3
Find all (a) Nash, (b) trembling-hand perfect, (c) proper equilibria (in pure or mixed
strategies) of the following normal-form game.
L R
U 2,2 2,2
M 3,3 1,0
D 0,0 1,1

Question 4
Give an example of a finite normal-form game G and a strategy profile σ such that for
1 2
each player i, there exists a sequence σ− i , σ−i , . . . of independent trembles of i’s opponents
k
(i.e. each σ− i specifies a full-support distribution over strategy profiles of players −i in which

the various players j 6= i mix independently of each other), converging to σ−i , such that σi
k
is a best response to σ−i for each k, but σ is not a perfect equilibrium of G.

Question 5
Is the following statement true or false? Give a proof or counterexample. Suppose G
is a finite extensive-form game with perfect recall, and hx = {x, x0 }, hy = {y, y 0 } are two
information sets, such that x is a predecessor of y, x0 is a predecessor of y 0 , and the action
taken from x along the tree toward y is the same as the action taken from x0 toward y 0 .
Then there cannot be a consistent assessment (σ, µ) such that µ(x|hx ) = 1 and µ(y|hy ) = 0.
(Note that this looks like the “no signaling what you don’t know” condition, but now we do
not require that x immediately precedes y; there may be other nodes in between.)

Question 6
Consider the following version of Rubinstein alternating offers bargaining game. There are
three players and utility of player i = 1, 2, 3 from getting fraction xi of a pie in period T is
equal to δ T xi . In the first period, player 1 proposes a partition (i.e. a vector x = (x1 , x2 , x3 )
with x1 + x2 + x3 = 1), and players 2 and 3 in turn accept or reject this proposal. If
PROBLEM SET 2 3

either of them rejects it, then play passes to the next period, in which it is player 2s turn
to propose a partition, to which players 3 and 1 in turn respond. If at least one of them
rejects the proposal, then again play passes to the next period, in which player 3 makes a
proposal, and players 1 and 2 respond. Players rotate proposals in this way until a proposal
is accepted by both responders. Show that for any division of pie x if δ > 1/2 then there is
a subgame-perfect equilibrium in which x is agreed upon immediately.
MIT OpenCourseWare
https://ocw.mit.edu

14.126 Game Theory


Spring 2016

For information about citing these materials or our Terms of Use, visit: https://ocw.mit.edu/terms.

You might also like