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Basics of Game Theory

This is Problem Set 1 for the Econ 143 course, due on April 23. It includes 5 problems related to game theory and equilibrium calculations.

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Added on  2023-02-01

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This document provides an overview of the basics of game theory, including dominant strategies, Nash equilibrium, and subgame perfect Nash equilibrium (SPNE). It discusses various examples and applications of game theory in business and economics. The document also includes solved assignments and essays on game theory.

Basics of Game Theory

This is Problem Set 1 for the Econ 143 course, due on April 23. It includes 5 problems related to game theory and equilibrium calculations.

   Added on 2023-02-01

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Running head: BASICS OF GAME THEORY
Basics of Game Theory
Name of the Student:
Name of the University:
Author Note:
Basics of Game Theory_1
1BASICS OF GAME THEORY
Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................3
Answer 4 Part I...........................................................................................................................4
Answer 4 Part II. 1.....................................................................................................................4
Answer 4 Part II. 2.....................................................................................................................6
Answer 5 Part I...........................................................................................................................6
Answer 5 Part II.........................................................................................................................6
Answer 5 Part III........................................................................................................................7
Reference....................................................................................................................................8
Basics of Game Theory_2
2BASICS OF GAME THEORY
Answer 1
2
C D
1 C 9 9 -1 10
D 10 -1 0 0
In the above game, the dominant strategy for both the players (1,2) is (D,D) that is
(0,0). But there exist a Nash equilibrium which is (C,C) that means (9,9) is the pay of for the
two players (1,2).
Answer 2
2
L R
1
U 4 1 0 0
D 0 0 1 4
There exists pure Nash equilibrium in case of the given coordination game. Here, two
Nash equilibriums exist. The Nash strategies for the players (1,2) are (U,L) and (D,R)
(Webster).
2
L(q) R(1-q)
1 U(p) 4 1 0 0
D(1-p) 0 0 1 4
The probabilities are mentioned with the players’ strategy.
Basics of Game Theory_3

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