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Solution SGT 2024 1

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Mukund Tiwari
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24 views3 pages

Solution SGT 2024 1

Uploaded by

Mukund Tiwari
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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1. The Nash equilibrium of the game is (𝐿, 𝐿).

Ans d
2. The number of Nash equilibria of the game is 2

𝐷 𝑅

𝐷 𝟐, 𝟐 0,1

𝑅 1,0 𝟏, 𝟏

Ans c

The utility functions are


𝑢1 (𝑥1 , 𝑥2 ) = 3𝑥1 𝑥2 − 2𝑥12
𝑢2 (𝑥2 , 𝑥1 ) = 3𝑥1 𝑥2 − 2𝑥22
Table below shows payoffs of the game.
x1, x2 0 1 2 3 4
0 𝟎, 𝟎 0, −2 0, −8 0, −18 0, −32
1 −2,0 𝟏, 𝟏 𝟒, −2 7, −9 10, −20
2 −8,0 −2, 𝟒 𝟒, 𝟒 𝟏𝟎, 0 16, −8
3 −18,0 −9,7 0, 𝟏𝟎 9,9 𝟏𝟖, 4
4 −32,0 −20,10 −8,16 4, 𝟏𝟖 16,16

3. It can be seen from the table above that both 𝑥2 = 1 and 𝑥2 = 2 are the best response(s)
of 𝑃2 to action 𝑥1 = 2 of 𝑃1
Ans c
4. It can be seen that (3,4), (4,3), (4,4) are Pareto optimal, but NOT (3,3) since both
players can improve their payoffs by shifting to (4,4)
Ans b

0 5 10 15

0 𝟏𝟓, 0 0, 𝟏𝟎 0, 𝟏𝟎 𝟎, 𝟏𝟎

5 𝟏𝟓, 0 𝟏𝟎, 0 0, 𝟓 𝟎, 𝟓

10 𝟏𝟓, 𝟎 𝟏𝟎, 𝟎 𝟓, 𝟎 𝟎, 𝟎

15 𝟏𝟓, 𝟎 𝟏𝟎, 𝟎 𝟓, 𝟎 𝟎, 𝟎
5. The game table for the second price auction is above. The quantity 𝑈2 (5,10) denotes
the payoff to player 2 for action 5 of player 2 and action 10 of user 1, which equals 0
Ans a
6. Best responses are marked in bold. It can be seen that best responses of 𝑃2 to bid 𝑏1 =
5 of 𝑃1 are
{10,15}
Ans b
7. As can be seen from the table above, (10,5) is an NE of the game
Ans a
The game table for the war of attrition game is shown below where P1 is the row player
and P2 is the column player. The best responses are marked in bold font. Given 𝑣1 =
20, 𝑣2 = 15.
For instance, consider the outcome (5, 10) where 𝑃1 concedes at 𝑡1 = 5 and 𝑃2
concedes at 𝑡2 = 10. Thus since 𝑃1 concedes early at 5, his payoff is −2𝑡1 =
−2 × 5 = −10 while the payoff of 𝑃2 is 𝑣2 – 2𝑡1 = 15 − 2 × 5 = 5.
On the other hand consider (5, 5) where both concede simultaneously at 5. Therefore,
𝑣 20 𝑣
payoff to player 1 is 21 − 2𝑡 = 2 − 2 × 5 = 0, while the payoff to player 2 is 22 −
15
2𝑡 = − 2 × 5 = −2.5.
2

The rest of the payoffs can be derived similarly

0 5 10 20

0 10,7.5 0, 𝟏𝟓 𝟎, 𝟏𝟓 𝟎, 𝟏𝟓

5 𝟐𝟎, 0 0, −2.5 −10, 𝟓 −10, 𝟓

10 𝟐𝟎, 𝟎 𝟏𝟎, −10 −10, −12.5 −20, −5

20 𝟐𝟎, 𝟎 𝟏𝟎, −10 𝟎, −20 −30, −32.5

8. From Table 1, 𝑈2 (20,20) = −32.5, i.e. payoff of player 𝑃2 when both players concede
at 𝑡 = 20.
Ans c
9. If player 2 gives up at 𝑡2 = 10, it can be seen that the best response of player 1 is Both
𝑡1 = 0 AND 𝑡1 = 20
Ans a
10. Out of the given options, it can be seen that only (0,20) is a Nash equilibrium of the
game
Ans d

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