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Ben Polak Solution Set 1

This document provides solutions to economics problems. Solution 1 defines key terms used in game theory like players, strategies, payoffs, and dominated strategies. It gives examples of strictly and weakly dominated strategies. Solution 2 examines a game with weakly dominated strategies and describes iteratively deleting them. Solution 3 analyzes a voting game, finding some strategies are weakly dominated. Solution 4 considers voting strategies and finds some are weakly or strictly dominated.

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2K views

Ben Polak Solution Set 1

This document provides solutions to economics problems. Solution 1 defines key terms used in game theory like players, strategies, payoffs, and dominated strategies. It gives examples of strictly and weakly dominated strategies. Solution 2 examines a game with weakly dominated strategies and describes iteratively deleting them. Solution 3 analyzes a voting game, finding some strategies are weakly dominated. Solution 4 considers voting strategies and finds some are weakly or strictly dominated.

Uploaded by

nitzr7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ECON 159a Solution Set 1

Keith Wannamaker
[email protected]
November 15, 2009

Solution 1

player
strategy of a particular player i
set of strategies for player i
payout (utile)
strategy choices for everyone else but player i

1.1

i, j
si
Si
ui (s1 , ...sN )
si

(a)

A strictly dominated strategy A (si ) means that, regardless of the opponents strategy, there is a higher
payoff for (strictly dominating) strategy B (si ). Formally player is strategy si is strictly dominated by
player is strategy si if ui (si , si ) > ui (si , si ) for all si .

1.2

(b)

A weakly dominated strategy A (si ) means that, regardless of the opponents strategy, there is at least as
good of a payoff for (weakly dominating) strategy B (si ), and, for at least one of the opponents strategies,
there is a higher payoff for strategy B. Formally player is strategy si is weakly dominated by player is
strategy si if both ui (si , si ) >= ui (si , si ) for all si and also ui (si , si ) > ui (si , si ) for at least one si .

1.3

(c)

T is strictly dominated by M for player 1; C is weakly (but not strictly) domainted by L for player 2.

player 1

T
M
B

L
1,1
2,0
1,0

player
C
-1,0
0,0
1,0

2
R
0, -1
1, 0
0, 0

2
2.1

Solution 2
(a)

There are no strictly dominated strategies. M is weakly dominated by D for player 1 and c is weakly
dominated by r for player 2.

2.2

(b)

If player 2 assumes player 1 will never play weakly dominated M , and player 1 assumes player 2 will never
play weakly dominated c, these strategies can be deleted. After deleting M and c, D is weakly dominated
by T for player 1 and r is weakly dominated by l for player 2. A second round of deletion would leave just
T and l.

2.3

(c)

In the first round of deletion, the worst-case utile was 1 for both players. In the second round of deletion,
again, the worst-case util was 1 for both players. Iteratively deleting the weakly dominated strategies left
nothing but the worst-case util of 1 for both players.

3
3.1

Solution 3
(a)

The payoff matrix is listed in table 3.a. A graph of ui is included in Figure 1. si (1) is strictly dominated
by si (2, 3..7). Because of symmetry, si (10) is certainly not any better than si (1). si (8) and si (9) are worse
than si (1) when the opponent picks an adjacent or nearly adjacent position.

1
2
3
4
5
6
7
8
9
10

3.2

1
50,50
90,10
85,15
80,20
75,25
70,30
65,35
60,40
55,45
50,50

2
10,90
50,50
80,20
75,25
70,30
65,35
60,40
55,45
50,50
45,55

3
15,85
20,80
50,50
70,30
65,35
60,40
55,45
50,50
45,55
40,60

4
20,80
25,75
30,70
50,50
60,40
55,45
50,50
45,55
40,60
35,65

Table 1:
5
25,75
30,70
35,65
40,60
50,50
50,50
45,55
40,60
35,65
30,70

3.a
6
30,70
35,65
40,60
45,55
50,50
50,50
40,60
35,65
30,70
25,75

7
35,65
40,60
45,55
50,50
55,45
60,40
50,50
30,70
25,75
20,80

8
40,60
45,55
50,50
55,45
60,40
65,35
70,30
50,50
20,80
15,85

9
45,55
50,50
55,45
60,40
65,35
70,30
75,25
80,20
50,50
10,90

10
50,50
55,45
60,40
65,35
70,30
75,25
80,20
85,15
90,10
50,50

(b)

Strategy 1 is weakly dominated by strategy 2. The worst ui for si (1) is to receive only 5 votes (other players
choose s(1) and s(2)), but otherwise ui for si (1) >= 10 as player 1s vote is not split. The worst ui for
2

Figure 1: Player 1 utile


100

ui

90
80

70

60

50

4
5

40

30

20

10

10
1

10

sj

si (2) is to receive 10 votes when another player chooses s(3) and the third player chooses s(1) or s(2), but
otherwise ui for si (2) > 10. si (2) > si (1) because si (2) includes at least a portion of s(1)s 10 votes.
si (1, si )
si (1, 3, 2)
si (1, 2, 3)

<
=
=
=

si (2, si ), except
si (2, 3, 2)
si (2, 2, 3)
10

Strategy 1 is also weakly dominated by strategy 3, for the same reason. The worst ui for si (3) is to receive
10 votes (sj (2), sk (4)), but otherwise si (3) gives the opportunity of more votes.
si (1, si )
si (1, 4, 2)
si (1, 4, 3)
si (1, 2, 4)
si (1, 3, 4)

<
=
=
=
=

si (3, si ),
si (3, 4, 2)
si (3, 4, 3)
si (3, 2, 4)
si (3, 3, 4)

except
= 10
= 15
= 10
= 15

After iteratively deleting strategies 1 and 10, strategy 2 is not dominated by any other pure strategy si in
the reduced game. There are always cases where ui si (2) does better than si when sj and sk are adjacent to
si because in the si (2) case, si cant be 1 by definition.
si (3, 2, 4)
si (4, 3, 5)
si (5, 3, 6)
si (6, 4, 7)
si (7, 5, 7)
si (8, 4, 8)
si (9, 2, 8)

<
<
<
<
<
<
<
3

si (2, 2, 4)
si (2, 3, 5)
si (2, 3, 6)
si (2, 4, 7)
si (2, 5, 7)
si (2, 4, 8)
si (2, 2, 8)

Solution 4

4.1

(a)

(See Farquharson, The theory of voting, or McKelvey/Niemi)


s1 (a) strictly dominates s2 (b) and s2 (c). s1 (a) wins a 7/9 of the time and in the other 2 cases, s1 is
irreveant. Assuming s1 (a), the payoff for player 2 and 3 is:

a
Member 2 b
c

Member
a
b
1,0 1,0
1,0 0,2
1,0 1,0

3
c
1,0
1,0
2,1

For s2 , s2 (c) weakly dominates s2 (b) and s2 (a). For s3 , s3 (a) is weakly dominated by s3 (b) and s3 (c).

4.2

(b)

After removing s2 (a), s2 (b), and s3 (a), the predicted vote is s(a, c, c). c will win, which is worst for 1, even
though 1 had tiebreaker power.

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