### Formulate this as a game on normalform

Assignment Help Macroeconomics
##### Reference no: EM13962450

Exercise 1-
Consider the following game - called "Stone-Scissor-Paper":

There are 2 players, player 1 and 2. The two players are placed with their front against each other, with the one fist clenched. Simultanously the players rais their arm and counts to 3. Reaching 3 each player forms the fist of either: "Stone" (the fist is kept clenched), "Scissor" (the fore- and ring finger is unfolded and separated) or "Paper" (The entire fist is unfolded). The result is the: either player 1 wins, player 2 wins or it is a draw. A player who wins gets a payoff of 1, the looser gets a payoff of -1 while a draw yields a player a payoff of 0. Who wins depends on the ordering: "Stone beats Scissor", "Scissor beats Paper" and "Paper beats Stone".

1. Formulate this as a game on normalform. Find the Bi-matrix.
2. Do there exists a Nash equilibrium in pure strategies of this game?
3. What is a mixed strategi of player 1 in this game?

Exercise 2

Consider the following game given by their Bimatrix

L      C         R
T      2,0     1,1      4,2
M      3,4     1,2      2,3
B      1,3     0,2       3,0
• Is the strategy "B" a dominated strategy for player 1?
• Find the strategies that survives an iterativ deletion of dominated strategies
• Find Nash equilibrium i pure strategies
Exercise 3
Consider the following description of a game.
There are 2 players, player 1 and 2, and a gamemaster. The gamemaster has a coin that is bent such that, flipped randomly, the coin will come up with "heads" 80% of the time. Both players know this. The game-master flips the coin and shows the result to player 1. Player 1 makes an announcement to player 2 what the result of the flip is, either "head" or "tail". Player 2 having heard player l's announcement but not seen the result must guess what the result of the flip was. Player 1 has the following payoffs: if player 2 guess "head" payoff is 2 and payoff is 0 if the guess is "tail". Moreover, if player l's announcement is correct player l's payoff is increased by 1. For player 2 the payoff is 1 if he guesses right and 0 if his guess is wrong.
• Formulate this game as a game on extensivform. What is the game tree.
• What is the normalform representation of this game?
• Find all Nash equilibria of this game

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