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Economics 2030 Problem Set 12 Solutions

This document contains the instructions for Problem Set 12 in Economics 2030 during the Winter 2014 term. It lists 5 exercises involving game theory and strategic reasoning. Exercise 1 and 2 refer to problems in the course textbook. Exercise 3 asks to find all weak sequential equilibria of an extensive game with imperfect information depicted in Figure 1. Exercise 4 asks to find all sequential equilibria of the game shown in Figure 2. Exercise 5 asks to determine values of payoffs for which the game in Figure 3 has either a weak sequential "separating" equilibrium or a weak sequential "pooling" equilibrium.

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6 views2 pages

Economics 2030 Problem Set 12 Solutions

This document contains the instructions for Problem Set 12 in Economics 2030 during the Winter 2014 term. It lists 5 exercises involving game theory and strategic reasoning. Exercise 1 and 2 refer to problems in the course textbook. Exercise 3 asks to find all weak sequential equilibria of an extensive game with imperfect information depicted in Figure 1. Exercise 4 asks to find all sequential equilibria of the game shown in Figure 2. Exercise 5 asks to determine values of payoffs for which the game in Figure 3 has either a weak sequential "separating" equilibrium or a weak sequential "pooling" equilibrium.

Uploaded by

Amy Pei
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

Economics 2030

Winter 2014

Martin J. Osborne
Problem Set 12

1. Exercise 216.1 in the book.


2. Exercise 217.3 in the book.
3. Find all the weak sequential equilibria of the extensive game with imperfect information in Figure 1.

0, 0

N
1
2

0, 0

100, 50

100, 0

100, 150

100, 0

(E)
2

Chance
1
2

(I)
C

N
1

Figure 1. The game in Exercise 3.

4. Find all the sequential equilibria of the game in Figure 2.


5. Consider the game in Figure 3. For what values of (a1 , a2 ) and (b1 , b2 ),
if any, does the game have a weak sequential (separating) equilibrium in which a strong challenger chooses Ready and a weak one
chooses Unready? For what values of these payoffs, if any, does the
game have a weak sequential (pooling) equilibrium in which both
types of challenger choose Unready?

1
L

1, 1

3, 1

2, 0

2, 0

1, 1

Figure 2. The game in Exercise 4.

4, 2

2, 1

Ready
Challenger
Unready

Incumbent

a1 , a2

b1 , b2

p Chance 1 p
Strong
Weak
Incumbent

Ready
Challenger
Unready

5, 2

3, 1

5, 0

3, 1

Figure 3. The game in Exercise 5. The Challengers payoff is listed first, the incumbents
second.

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