Nash equilibrium, Finance Basics

Suppose that two players are playing the following game.  Player A can choose either Top or Bottom, and Player B can choose either Left or Right.  The payoffs are given in the following table:

 

 

                   Player B

 

Player A

 

Left

Right

Top

 2               5

1             4

 

Bottom

 0               1

3             8

where the number on the left is the payoff to Player A, and the number on the right is the payoff to Player B. 

A) Does player A have a dominant strategy, and if so what is it?

B) Does player B have a dominant strategy and if so what is it?

C) For each of the following say True if the strategy combination is a Nash equilibrium, and False if it is not a Nash equilibrium:

i) Player A plays Top and Player B plays Left

ii) Player A plays Bottom and Player B plays Left

iii) Player A plays Top and Player B plays Right

iv) Player A plays Bottom and Player B plays Right

D) If each player plays her maximin strategy what will be the outcome of the game?  (Give your answer in terms of the strategies each player chooses-for example, "Player A plays Bottom and Player B plays Right"

E) Now suppose the same game is played with the exception that Player A moves first and Player B moves second.  Draw the game tree associated with this situation.  Using the backward induction method discussed in the online class notes, what will be the outcome of the game?

Posted Date: 2/23/2013 1:49:31 AM | Location : United States







Related Discussions:- Nash equilibrium, Assignment Help, Ask Question on Nash equilibrium, Get Answer, Expert's Help, Nash equilibrium Discussions

Write discussion on Nash equilibrium
Your posts are moderated
Related Questions
iwant to learn how todo the maths for accounting

what are the difference between receipt and payment account and income and expenditure account ?

The scope of supply chain management  Supply chain management includes the determination of suppliers; distributors, distribution channels and warehousing; manufacturing infor

After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.


what is cash budgeting and what is it used for

what is the importance of public expenditure

what are the qualitative factors to be considered when deciding on product mix

Determinants of Working Capital Needs There are few factors that determine the firm's working capital needs. These factors are comprehensively enclosed with a Textbook of Busi

There are four different commonly used financial hedging techniques and some operational hedging techniques that firms use to manage currency risk. Drawing on literature, critical