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StaticGamecompinfo Assign

The document outlines a problem set for a microeconomics course, focusing on static games of complete information. It includes specific problems to solve from Gibbons, a three-player game requiring the identification of pure and mixed strategy Nash Equilibria, and an analysis of a first-price auction scenario. The tasks involve determining strategy sets, payoffs, and equilibrium outcomes for the described games.

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4 views1 page

StaticGamecompinfo Assign

The document outlines a problem set for a microeconomics course, focusing on static games of complete information. It includes specific problems to solve from Gibbons, a three-player game requiring the identification of pure and mixed strategy Nash Equilibria, and an analysis of a first-price auction scenario. The tasks involve determining strategy sets, payoffs, and equilibrium outcomes for the described games.

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aadritadam2004
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Problem Set-Static Games of Complete Information

PG-Microeconomics 2 (Jadavpur University)


Instructor: Dr. Swapnendu Banerjee

(1). Solve Problems 1.2, 1.3, 1.8 and 1.10 (except Figure 1.1.4) from Gibbons.

(2). Consider the following three-player game in normal form:

2 2
L R L R

U 3, 2, 3 1, 2, 0 U 1, 4, 2 1, 2, 0
1 1
D 1, 2, 0 1, 2, 0 D 1, 2, 0 3, 4, 1

A 3 B

Player 1’s strategy space is {U , D} , Player 2’s strategy space is {L, R} and player 3
chooses one of the two payoff matrices: his/her strategy space is {A, B}.
(a). Find the pure strategy Nash Equilibria of such a game.
(b). Find the mixed strategy Nash Equilibria of such a game.

(3). Consider the following first price auction (complete info case). An indivisible object
is to be assigned to one of 2 players in exchange of a payment. Player 1’s payoff from the
consumption of the indivisible good is v1 while player 2’s payoff is v 2 and assume that
v1 = v 2 . The mechanism used to assign the object is a (sealed-bid) first price auction: the
players simultaneously submit bids (non-negative amounts), and the object is assigned to
the player who submits the highest bid, in exchange for a payment. If both players submit
the same bid then the object is assigned to the player with the lowest label. The payment
that the winner makes in a first-price auction equals the winner’s bid. If a player fails to
win the object he/she gets 0 utility (payoff).
(a). Describe the strategy sets and payoffs of both the players?
(b). Analyze the pure strategy Nash equilibria of such a game?
(c). Show that in all equilibria player 1 obtains the object?

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