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#Assignment Game Theory

The document is a Game Theory worksheet that presents a game structure involving two players, A and B, with various strategies and payoffs. It includes questions about dominant strategies, Nash equilibria, and the nature of the game, including whether it is a Prisoner's Dilemma. Additionally, it discusses a scenario involving Boeing's decision-making process regarding plant location and incentives offered by two states, as well as a situation involving two Internet providers and their pricing strategies.

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Abhishek
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Download as DOCX, PDF, TXT or read online on Scribd
11 views

#Assignment Game Theory

The document is a Game Theory worksheet that presents a game structure involving two players, A and B, with various strategies and payoffs. It includes questions about dominant strategies, Nash equilibria, and the nature of the game, including whether it is a Prisoner's Dilemma. Additionally, it discusses a scenario involving Boeing's decision-making process regarding plant location and incentives offered by two states, as well as a situation involving two Internet providers and their pricing strategies.

Uploaded by

Abhishek
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Game Theory Worksheet

Name: _________

1) A Game has the following structure:

Player A has two strategies, Yellow and Green, and Player B has two
strategies,
Red and Blue. The game is played simultaneously with both players
playing pure
strategies and being able to see the other player’s actions. The game, with
strategies and payoffs is given by the following payoff matrix:

a. Does either player have a dominant strategy and if so, what is it?

b. Indicate all the Nash equilibria in this game.

c. Is this game a Prisoner’s Dilemma?

d. What does that mean in the context of this game?

Suppose the game now has the following payoff matrix:


e. What is the minimum (discrete) value you could give for X to get around
any potential Prisoner’s Dilemma Nash equilibrium?

2) In the late 2000s, Boeing decided to build a new plant to manufacture the
Boeing 787 Dreamliner. Many areas were hoping that Boeing would decide
to build the plant in their state. To attract Boeing, the states considered
offering large tax incentives. Assume that two states were under serious
consideration by Boeing: Washington and South Carolina. Also assume that
each state had two options: no incentive or offer an incentive. Notice that
in the payoffs that follow, Boeing selects Washington if both states offer an
incentive.

a. Does Washington have a dominant strategy? If so, what is it?

b. Does South Carolina have a dominant strategy? If so, what is it?

c. Are there any Nash equilibria in this game? If so, what are they?

3) Two Internet providers supply a local market.

a. If they have the following profit matrix for charging low and high prices,
does either firm have a dominant strategy?

b. Is there a dominant-strategy equilibrium?


c. Is there a pure-strategy Nash equilibrium?

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