Argue that it is indeed a nash equilibrium

Assignment Help Business Economics

Reference no: EM131003482

Recall the second price auction game. Now suppose that there are three players, 1, 2, and 3, bidding for a single object in a second price auction. All three players value the object at 10, i.e., v1 = v2 = v3 = 10. For i = 1, 2, 3, let bi denote player i’s bid. The players are free to bid any price they like. The player with the highest bid wins the object, with ties broken by a fair lottery, and pays the highest bid among her opponents. Write down a bidding profile (b1,b2,b3) that constitutes a pure strategy Nash equilibrium (PSNE) of the game that have the following properties:

1) Write down a PSNE, in which NO player plays a weakly dominated action.

2) Write down a PSNE, in which player 3 wins the object with probability one. Argue that it is indeed a Nash equilibrium.

Reference no: EM131003482

Questions Cloud

Find the equilibrium allocation of labor to each sector : Consider an economy that produces food and cloth. Food is produced using land and labor. Cloth is produced using capital and labor. Initially, the world price of food and the world price of cloth are both $1 per unit. Find the equilibrium allocation ..

Carrying change management with me : Carrying Change Management with Me" Please respond to the following, After viewing the video below, reflect on the concepts and theories you have researched and learned about over the course of the past several weeks. From the list provided below, ch..

Differentiates temporary differences and permanent : Identifies the objectives of accounting for income taxes. Differentiates temporary differences and permanent differences.

Ideal policy of the median voter-nash equilibrium : Hotelling’s Model (10pts) Consider the Hotelling’s model with three players, each chooses a policy position on the real line. Is all three players choosing xm (the ideal policy of the median voter) a Nash equilibrium? Explain your answer.

Argue that it is indeed a nash equilibrium : Recall the second price auction game. Now suppose that there are three players, 1, 2, and 3, bidding for a single object in a second price auction. All three players value the object at 10, i.e., v1 = v2 = v3 = 10. For i = 1, 2, 3, let bi denote play..

The market-level price elasticity of demand : You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $1.5 million. In your market, you compete against two other deal..

Timberland''s culture rooted in community building : Volunteerism and service are key components of Timberland's corporate values. For each of the Human resources functions outlined in the chapter, provide examples of the skills employees gain though the company's culture of volunteerism and community ..

Walmart reported as a noncurrent liability : In its 2009 balance sheet, Walmart reported as a noncurrent liability, "Deferred income taxes" of $3,076 million. Why is this different from the $1,605 million "net deferred tax liability" reported in the disclosure note?

Use the theory of economic development : Essay Question: Use the Theory of Economic Development to explain transformations in the US economy today. You will need to do some additional research to discover some examples to illuminate that theory

User Account

All Pages