Econ 402.2 Spring 2016

Econ 402.2 Spring 2016 Homework 2 Due at the beginning of class, Tuesday, February 16 1. For each of the following two nonzero-sum games, is the game strategically equivalent to a ZSG? If your answer is “YES,” give a strategically equivalent ZSG and show why it is strategically equivalent. If your answer is “NO,” explain why not. a) (2 points) L R U 4, -2 0, 0 D -2, 1 6, -3 b) (2 points) L R U -1, 2 4, 4 D -2, 0 3, 2 2. (3 points) For the following game, a mixed strategy (s2(L), 1 - s2(L), 0) dominates R if a < s2(L) < b. L C R U 8, 6 0, 2 8, 3 D 1, 0 2, 6 5, 1 Find a and b. Show your work clearly. 3. (3 points) For the following game, R is a best response to a belief (?1(U), 1 - ?1(U)) if a = ?1(U) = b. L C R U 8, 6 0, 2 8, 5 D 1, 0 2, 6 5, 3 Find a and b. Show your work clearly. 4. (5 points) Problem 4 on page 75 of the text. 5. (5 points) Problem 7 on page 76 of the text.