Tutorial 1 in the A4-size paper note: all tutorial questions from tutorial 1 – tutorial 4

Question 1: Dominance Analysis and Best Response Analysis

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Question 1: Dominance Analysis and Best Response Analysis

Consider the following game table:

  1. Does either Rowena or Colin have a dominant strategy? Explain why or why not.

  2. Use iterated elimination of dominated strategies (dominance analysis) to reduce the game as much as possible. Given the order in which the eliminations occur and give the reduced form of the game.

  3. Is this game dominance solvable? Explain why or why not.

  4. State the Nash equilibrium (or equilibria) of this game.

Question 2: Best Response Analysis and Game of Coordination

An old lady is looking for help crossing the street. Only one person is needed to help her; if more people help her, this is no better. You and I are the two people in the vicinity who can help; we have to choose simultaneously whether to do so. Each of us will get pleasure worth a 3 from her success (no matter who helps her). But each one who goes to help will bear a cost of 1, this being the value of our time taken up in helping. If neither player helps, the payoff for each player is zero. Set this up as a game. Write the payoff table, and find all pure-strategy Nash equilibria.

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