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A class of games of imperfect data during which one player (the principal) tries to supply incentives to the opposite (the agent) to encourage the agent to act within the principal's best interest. Often, such incentives are given to beat the ethical hazard drawback during which the agent has inadequate incentives to perform.
a) Define the term Nash equilibrium b) You are given the following pay-off matrix: Strategies for player 1 Strategies for player 2
Limitations of game theory in finance
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The following is a payoff matrix for a non-cooperative simultaneous move game between 2 players. The payoffs are in the order (Player 1; Player 2): What is the Dominant Strat
A strategy is strictly dominant if, no matter what the other players do, the strategy earns a player a strictly higher payoff than the other. Hence, a method is strictly dominant i
Discussion in the preceding section suggests that if we want to measure a given hnction belonging to a simultaneous-equations model, the hnction must be fairly stable over the samp
Find Pure Nash Equilibria 1. Consider a two-player game in which player 1 chooses the strategy x 1 from the closed interval [-1, 1] while player 2 chooses the strategy x 2 fr
Consider a game in which player 1 chooses rows, player 2 chooses columns and player 3 chooses matrices. Only Player 3''s payoffs are given below. Show that D is not a best response
An item of information of data in a very game is common grasp ledge if all of the players realize it (it is mutual grasp ledge) and every one of the players grasp that each one dif
"Assurance game" is a general name for the game more commonly known as "Stag Hunt." The French philosopher, Jean Jacques Rousseau, presented the subsequent circumstances. Two hunte
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