... 3(a - e)/4, is greater than aggregate quantity in the Nash equilib- rium of the Cournot game, 2(a - e)/3, so the market-clearing price is lower in the Stackelberg game.. Thus, i[r] ...
... If the stage game has a unique NE, then for any T , the finitely repeated game has a unique SPNE: the NE of the stage game is played in every stage irrespective of the histor[r] ...
... (a) If an agent is risk averse, her risk premium is ALWAYS positive. (b) When every player has a (strictly) dominant strategy, the strategy profile that consists of each player’s dominant strategy MUST be a Nash ...
... 5. Bayesian Nash Equilibrium (12 points) There are three different bills, $5, $10, and $20. Two individuals randomly receive one bill each. The (ex ante) probability of an individual receiving each bill is therefore ...
... e z . The prices of the three goods are given by (p, q, 1) and the consumer’s wealth is given by ω. (a) Formulate the utility maximization problem of this consumer. (b) Note that this consumer’s preference ...
... (a) The intersection of any pair of open sets is an open set. (b) The union of any (possibly infinite) collection of open sets is open. (c) The intersection of any (possibly infinite) collection of closed sets is closed. ...
... payoff) while M gives 1 irrespective of player 1’s strategy. Therefore, M is eliminated by mixing L and R . After eliminating M , we can further eliminate D (step 2) and L (step 3), eventually picks up ( U , R ...
... A strategy in dynamic games is a complete action plan which prescribes how the player will act in each possible.. contingencies in future..[r] ...
... 4. Incomplete Information (16 points, think carefully) There are four different bills, $1, $5, $10, and $20. Two individuals randomly receive one bill each. The (ex ante) probability of an individual receiving each bill ...