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PS 2

The document consists of a series of questions related to game theory, focusing on strategic form games, payoff functions, and player beliefs. It includes specific scenarios involving players A, B, and C making choices within defined ranges and analyzing their outcomes. Additionally, it references chapters from Tadelis and Watson, indicating a study or assignment format for understanding concepts in game theory.

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14 views8 pages

PS 2

The document consists of a series of questions related to game theory, focusing on strategic form games, payoff functions, and player beliefs. It includes specific scenarios involving players A, B, and C making choices within defined ranges and analyzing their outcomes. Additionally, it references chapters from Tadelis and Watson, indicating a study or assignment format for understanding concepts in game theory.

Uploaded by

manas.juve
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PS 2

Q1. Tadelis Ch 3

Q2. Tadelis Ch 7: 7.3, 7.3, 7.4, 7.7


Q3.
Two students, Atisha (A) and Bandana (B) are working towards a group project. Each of
them simultaneously chooses how many hours to spend on the project ( Player i chooses ei)
out of a day. The grade from the project is the lower of the two chosen efforts (number of
hours). For each hour spent on the project, A loses ½ unit of utility and B loses ¼ units of
utility, these are the respective effort costs. The final utility of both of them is the grade that
they get from the project minus the respective effort cost.
a. Describe this situation as a strategic form game. In particular, what are I, Sis, and
the payoff functions?
b. If A believes that B will choose e B =0, what is the best response of A?

Q4.
I={A,B,C}. Player A can choose any integer between 1 to 3 (SA={1,2,3}), player B can
choose any integer between 5 to 8, and C can choose any integer between 11 to 13.
i. What is S-A ?
ii. Which one of the following is a valid belief of player A?
1. (0.1, 0.2, 0, 0, 0, 0.1, 0.5, 0.2, 0, 0, 0, 0)
2. (0.1, 0.1, 0, 0, 0, 0.1, 0.5, 0.2, 0, 0, 0, 0)
3. (0.1, 0.2, 0, 0, 0, 0.1, 0.5, 0.1, 0, 0, 0)
4. (0.1, 0.2, 0, 0, 0, 0, 0.1, 0.5, 0.1, 0, 0, 0, 0)

Q5.
Look at each of these game trees and check if there is anything wrong. If there is, specify.

c.
c.
d.

e.
Q6.
Analyse each of these situations.
a. I={A,B,C}. Player A can choose any integer between 1 to 3 (SA={1,2,3}), player B
can choose any integer between 5 to 8, and C can choose any integer between 11 to
13.
i. What is S-A ?
ii. Which one of the following is a valid belief of player A?
1. (0.1, 0.2, 0, 0, 0, 0.1, 0.5, 0.2, 0, 0, 0, 0)
2. (0.1, 0.1, 0, 0, 0, 0.1, 0.5, 0.2, 0, 0, 0, 0)
3. (0.1, 0.2, 0, 0, 0, 0.1, 0.5, 0.1, 0, 0, 0)
4. (0.1, 0.2, 0, 0, 0, 0, 0.1, 0.5, 0.1, 0, 0, 0, 0)
b. I={Red, Blue}. SRed={Top, Bottom}, SBlue={Left, Middle, Right}. Suppose the
payoff matrix is given as below:
Red\ Blue Left Middle Right
Top 3,2 11,9 1,0
Bottom 1,1 0,0 20,6

i. What is S-Red ?
ii. Which one of the following is a valid belief of player Red?
1. (0.1, 0, 0.9)
2. (0.5, 0. 5)
3. (0.5, 0, 0.5)
4. (0.1, 0.1, 0.7)
iii. Based on the belief which is the correct answer of the last question, what are
the expected payoffs of Red for each of his strategies?
iv. What is the best response of Red according to this belief?
Q7. Watson Ch 4: Q 1, 2, 3
(Watson has this abuse of notation in Q3: when it says sigma_j, it assumes that player i’s
belief is consistent, that is, theta_i is the same as sigma_j)
Q8. Watson Ch 6: Q 2; Q 4; Q5; Q1; Q7.

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