Find the pure-strategy nash equilibrium, Game Theory

Find the pure-strategy Nash equilibrium

Alice is on vacation in Wonderland and considers trying a special mushroom sold by the caterpillar. She cannot tell upfront if the mushroom is good or bad; she only discovers it later if it gives her a stomach ache. For the caterpillar, it costs more to sell good quality mushroom. The payoffs of Alice and the caterpillar are given in the table below:

1253_Find the pure-strategy Nash equilibrium.png

(a) A pure strategy is a strategy that does not involve randomization. Find the pure-strategy Nash equilibrium/equilibria of this game.

(b) Alice likes Wonderland so she decides to stay there for 10 days: the above game is repeated 10 times. Can you find a trigger strategy that induces Buy/Good for all 10 periods? How about the first 9 days?

(c) Alice falls in love with Wonderland and decides to live there for the rest of her life. The above game is thus repeated infinitely. If the interest rate is zero, explain what trigger strategy will induce the cooperative Buy/Good equilibrium.

(d) Assume now that the interest rate is greater than zero, and the game is repeated infinitely. Find a range of r such that the cooperative equilibrium can be sustained.

(e) It is possible that Alice will have to leave Wonderland and return home eventually. More specifically, each period players think that there is a 30% chance that the game does not continue next period. Is the cooperative equilibrium still possible to maintain? If yes, for what values of the interest rate? If not, why not?

 

Posted Date: 2/15/2013 6:48:02 AM | Location : United States







Related Discussions:- Find the pure-strategy nash equilibrium, Assignment Help, Ask Question on Find the pure-strategy nash equilibrium, Get Answer, Expert's Help, Find the pure-strategy nash equilibrium Discussions

Write discussion on Find the pure-strategy nash equilibrium
Your posts are moderated
Related Questions
For the section on dynamic games of competition, you can begin by asking if anyone in the class has played competi- tive tennis (club or collegiate or better); there is usually one

saaaaaaasfffffffffffffffffffaaaczzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

James and Dean are playing the Chicken game. They have noticed that their payout for being perceived as "tough" depends on the size of the crowd. The larger the crowd, the "cooler"

Another term for a preserved bid auction in which bidders simultaneously submit bids to the auctioneer with no knowledge of the amount bid by other member. Usually, the uppermost b

Borel was maybe the primary to outline the notion of games of strategy. He printed many papers on poker, incorporating themes of imperfect data and credibility. Whereas his writing

Stanley is auctioning an item that he values at zero. Betty and Billy, the two potential buyers, each have independent private values which are drawn from a uniform distribution, P

i have to make a tic tac toe game in matlab i dun have any idea what to do?

A sub game excellent Nash equilibrium is an equilibrium such that players' methods represent a Nash equilibrium in each sub game of the initial game. it should be found by backward

saaaaaaasfffffffffffffffffffaaaczzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

mixed strategy game with ordinal and cardinal payoffs example please