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##### FIU ECO2023 Assignment HW09 Chapter 20SPRING 14

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Question;1.;award:5 out of;5.00 points;Question and Exercise 20-3;Is the solution to the prisoner?s dilemma game a Nash equilibrium? Why?;Worksheet;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;436;Question and Exercise 20-3;Section: Game Theory and the Economic Way of Thinking;2.;award:5 out of;5.00 points;Question and Exercise 20-4;If a player does not have a dominant strategy, can the game still have a;Nash equilibrium?;Worksheet;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;436;Question and Exercise 20-4;Section: Game Theory and the Economic Way of Thinking;3.;award:5 out of;5.00 points;Question and Exercise 20-5;Two firms have;entered an agreement to set prices. The accompanying payoff matrix shows profit;for each firm in a market depending upon whether the firm cheats on the;agreement by reducing its prices.;Firm B;Cheats;Does not cheat;Firm A;Cheats;A: $0;B: $0;A: $100;B:?$50;Does not cheat;A:?$50;B: $100;A: $50;B: $50;a. What is the dominant strategy for each firm, if any?;Firm A:.;Firm B:.;b. What is the Nash equilibrium, if any?.;4.;award:5 out of;5.00 points;Question and Exercise 20-5 (algo);Two firms have;entered an agreement to set prices. The accompanying payoff matrix shows profit;for each firm in a market depending upon whether the firm cheats on the;agreement by reducing its prices.;Firm B;Cheats;Does not cheat;Firm A;Cheats;A: $0;B: $0;A: $50;B: $-100;Does not cheat;A: $-100;B: $50;A: $40;B: $40;a. What is the dominant strategy for each firm, if any?;Firm A:.;Firm B:.;b. What is the Nash equilibrium, if any?.;5 award:5 out of;5.00 points;Question and Exercise 20-6;Two people are;arrested and charged with the same crime. Each is given the opportunity to;accuse the other of the crime. The payoff matrix shows how much time each will;serve depending on who rats out whom.;Prisoner B;Accuses A;Remains silent;Prisoner A;Accuses B;A: 2 years;B: 2 years;A: Goes free;B: 10 years;Remains silent;A: 10 years;B: Goes free;A: Goes free B;Goes free;a. What is the dominant strategy for each, if any?;Prisoner A:.;Prisoner B:.;b. What is the Nash equilibrium, if any?Instructions: You may select;more than one answer. Click the box with a check mark for correct answers and;click to empty the box for the wrong answers.;Prisoner;A accuses and Prisoner B remains silent.;Both;accuse the other prisoner.;Both;remain silent.;Prisoner;A remains silent and Prisoner B accuses.;There;is no Nash equilibrium.;rev: 07_30_2013_QC_33121;6.;award:5 out of;5.00 points;Question and Exercise 20-6 (algo);Two people are;arrested and charged with the same crime. Each is given the opportunity to;accuse the other of the crime. The payoff matrix shows how much time each will;serve depending on who rats out whom.;Prisoner B;Accuses A;Remains silent;Prisoner A;Accuses B;A: 7 years;B: 6 years;A: 1 year B: 4 years;Remains silent;A: 3 years B: 5 years;A: Goes free B: Goes free;a. What is the dominant strategy for each, if any?;Prisoner A:.;Prisoner B:.;b. What is the Nash equilibrium, if any?;7.;award:3.34 out of;5.00 points;Question and Exercise 20-7;For each of the following, state whether Player A and Player B have a;dominant strategy and, if so, what each player?s dominant strategy is. (Note: Payoffs;represent dollars earned.);a.;Player B;X;Y;Player A;X;A: 5;B: 5;A: 10;B: 2;Y;A: 2;B: 10;A: 8;B: 8;Dominant strategy for;Player A.;Player B:.;b.;Player B;X;Y;Player A;X;A: 8;B:?8;A: 4;B:?4;Y;A: 10;B:?10;A:?5;B: 5;Dominant strategy for;Player A:.;Player B:.;c.;Player B;X;Y;Player A;X;A:?2;B: 1;A:?1;B: 2;Y;A:?1;B:?1;A:?3;B: 1;Dominant strategy for;Player A:.;Player B:.;Worksheet;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;436;Question and Exercise 20-7;Section: Game Theory and the Economic Way of Thinking;8.;award:5 out of;5.00 points;Question and Exercise 20-7 (algo);For each of the following, state whether Player A and Player B have a;dominant strategy and, if so, what each player?s dominant strategy is. (Note: Payoffs;represent dollars earned.);a.;Player B;X;Y;Player A;X;A: 5;B: 5;A: 6;B: 4;Y;A: 3;B: 7;A: 4;B: 8;Dominant strategy for;Player A.;Player B:.;b.;Player B;X;Y;Player A;X;A: 10;B: -7;A: 3;B: -3;Y;A: 7;B: -10;A: -6;B: 6;Dominant strategy for;Player A:.;Player B;c.;Player B;X;Y;Player A;X;A: 10;B: 4;A: 15;B: 5;Y;A: 8;B: 7;A: 10;B: 3;Dominant strategy for;Player A:.;Player B:.;9.;award:5 out of;5.00 points;Question and Exercise 20-8;Would the results of the prisoner?s dilemma game be different if it were;a sequential rather than a simultaneous game?;Worksheet;Learning Objective: 20-02 Discuss how strategic reasoning and backward;induction are used in solving games.;441;Question and Exercise 20-8;Section: An Overview of Game Theory as a Tool in Studying Strategic;Interaction;0.;award:5 out of;5.00 points;MC Qu. 016 Game theory is designed to study situations in whi...;Game theory is designed to study situations in which each agent's;decisions are;interdependent.;independent.;constrained.;uninformed.;Game theory is best applied to strategic thinking. This is when;decisions are interdependent;Multiple Choice;Difficulty: 2 Medium;Section: Strategic Reasoning;MC Qu. 016 Game theory is designed to study situations in whi...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;11.;award:5 out of;5.00 points;MC Qu. 022 The prisoner's dilemma is a well-known game in whi...;The prisoner's dilemma is a well-known game in which;cooperation is always the best independent action.;noncooperation is not the best joint action but is the best;independent action.;players always cheat.;players never cheat.;In the prisoner's dilemma game, cooperation is beneficial for both;prisoners but difficult to achieve. There are gains to both cooperative action;and independent action. Individuals don't always act in their best joint;interest.;Multiple Choice;Difficulty: 2 Medium;Section: Prisoners Dilemma;MC Qu. 022 The prisoner's dilemma is a well-known game in whi...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;2.;award:5 out of;5.00 points;MC Qu. 024 The values in a payoff matrix show;The values in a payoff matrix show;the gains and losses of decisions for each player regardless of the;decisions of other players.;the best possible outcomes of various players in a game.;the gains and losses of decisions for each player given the decisions;of other players.;the worst possible outcomes of various players in a game.;The values in a payoff matrix show both the gains and the losses of various;decisions based on the decisions of all other players in the game.;Multiple Choice;Difficulty: 2 Medium;Section: Payoff Matrices;MC Qu. 024 The value;13.;award:5 out of;5.00 points;MC Qu. 027 The equilibrium solution for the following payoff...;The equilibrium solution for the following payoff matrix is;1, 1.;2, 0.;0, 2.;-1, -1.;The equilibrium solution is where each player maximizes the expected;payoff. A is best off choosing column 2. Therefore, knowing that A will choose;column 2, B will choose row 2.;Multiple Choice;Difficulty: 3 Hard;Section: Payoff Matrices;MC Qu. 027 The equilibrium solution for the following payoff...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;14.;award:5 out of;5.00 points;MC Qu. 032 Don and Dana have both been accused of insider tra...;Don and Dana have both been accused of insider trading. Don knows that;if he confesses while Dana keeps silent, he will receive a 1-month jail;sentence. He also knows that if Dana confesses and he keeps silent, he will;receive a 12-month jail sentence. If neither of them confesses, there will be;insufficient evidence to convict either of insider trading, but there is enough;evidence to convict each of them individually of obstructing justice, which;carries a 2-month sentence. If both of them confess, they will both serve a;3-month jail sentence. This situation is;an example of cartel behavior.;an application of the prisoner's dilemma.;not realistic because those accused of insider trading always keep;silent.;not realistic because those accused of insider trading are never;encouraged to confess.;See the explanation of the prisoner's dilemma in the text.;Multiple Choice;Difficulty: 3 Hard;Section: Prisoners Dilemma;MC Qu. 032 Don and Dana have both been accused of insider tra...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;15.;award:5 out of;5.00 points;MC Qu. 034 TV crime shows illustrate the prisoner's dilemma w...;TV crime shows illustrate the prisoner's dilemma when;the judge ponders the sentence for the crimes.;the prisoners go to prison for the first time.;the police interview suspects in the same room.;the police interview suspects in different rooms.;When suspects are interviewed in different rooms, they do not know what;the other suspects are going to do and hence seek the best deal for themselves.;Multiple Choice;Difficulty: 2 Medium;Section: Prisoners Dilemma;MC Qu. 034 TV crime shows illustrate the prisoner's dilemma w...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;16.;award:5 out of;5.00 points;MC Qu. 037 What is true about the following payoff matrix?&nb...;What is true about the following payoff matrix?;Players cannot jointly do better by cooperating.;Players cannot escape the 0-0 payoff.;Player A is better off lying that he will choose column 1 and then;choosing column 2.;Player B is better off lying that she will choose row 1 and then;choosing row 2.;Since both players are better off choosing column 1 and row 1;respectively, which has the same joint payoff as the other options, they are;not better off cooperating. A is better off saying he will choose column 1 and;in fact choosing column 1. B is better off saying she will choose row 1 and in;fact choosing row 1.;Multiple Choice;Difficulty: 2 Medium;Section: Payoff Matrices;MC Qu. 037 What is true about the following payoff matrix?&nb...;Learning Objective: 20-01 Explain what game theory is and give an;example of a game and a solution to a game.;17.;award:5 out of;5.00 points;MC Qu. 038 What is true about the following payoff matrix?&nb...;What is true about the following payoff matrix?;Only player A has a dominant strategy.;Only player B has a dominant strategy.;Both player A and player B have dominant strategies.;Neither player A nor player B has a dominant strategy.;Since both players are better off choosing column 1 and row 1;respectively, regardless of what the other player does, both have dominant;strategies.;Multiple Choice;Difficulty: 2 Medium;Section: Dominant and Mixed Strategies;MC Qu. 038 What is true about the following payoff matrix?&nb...;Learning Objective: 20-02 Discuss how strategic reasoning and backward;induction are used in solving games.;18.;award:5 out of;5.00 points;MC Qu. 042 A Nash equilibrium is;A Nash equilibrium is;the payoff that maximizes the joint payoff.;****;the output level that minimizes average total cost.;the strategy that maximizes the outcome of all the players.;the set of strategies such that no player can improve his or her;position by changing his or her own action.;See the definition of a Nash equilibrium in the text. A Nash equilibrium;refers to the set of strategies by all the players, not just one player's;individual strategy.;Multiple Choice;Difficulty: 2 Medium;Section: Nash Equilibrium;MC Qu. 042 A Nash equilibrium is;Learning Objective: 20-02 Discuss how strategic reasoning and backward;induction are used in solving games.;19.;award:5 out of;5.00 points;MC Qu. 044 A Nash equilibrium refers to a;A Nash equilibrium refers to a;cooperative game.;a sequential game.;a repeated game.;a noncooperative game.;See the definition of a Nash equilibrium in the text. A Nash equilibrium;refers to a noncooperative game set of strategies. That is, players are unable;to cooperate and attempt to make the best decision for themselves while;considering that the other player follows his or her own best strategy.;Multiple Choice;Difficulty: 2 Medium;Section: Nash Equilibrium;MC Qu. 044 A Nash equilibrium refers to a;Learning Objective: 20-02 Discuss how strategic reasoning and backward;induction are used in solving games.;20.;award:5 out of;5.00 points;MC Qu. 045 The Nash equilibrium in the following payoff matri...;The Nash equilibrium in the following payoff matrix is;-1, -1.;-1, 1.;1, -1.;There is no Nash equilibrium.;A Nash equilibrium is a set of strategies for each player in which no;player can improve his or her payoff by changing strategy unilaterally. If B;chooses row 1, A's best strategy is to choose column 1. But if B chooses row 2;A's best strategy is to choose column 2. If A chooses column 1, B's best;strategy is to choose row 2. But if A chooses column 2, B's best strategy is to;choose row 1. Thus, there is no Nash equilibrium. Each player can improve his;or her payoff by changing strategy unilaterally.;Multiple Choice;Difficulty: 3 Hard;Section: Nash Equilibrium;MC Qu. 045 The Nash equilibrium in the following payoff matri...;Learning Objective: 20-02 Discuss how strategic reasoning and backward;induction are used in solving games.;*

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