Game Theory. Master in Economics UB.

Problem Set 2
Deadline: Wednesday, May 14th, 2014
1. The next table represents a situation in tennis where the server (player 1) decides
whether to serve to the opponents forehand (F), center (C) or backhand (B)
side.Simultaneously, the receiver (player 2) decides whether to favor the forehand,
center or backhand side.
F C B
F 0, 5 2, 3 2, 3
C 2, 3 0, 5 3, 2
B 5, 0 3, 2 2, 3
(a) Which pure strategies of each player are rationalizable?
(b) Is strategy F of player 1 strcitly dominated by some other pure or mixed
strategy?
(c) Find all Nash equilibria in pure and mixed strategies.
2. Transports Metropolitans de Barcelona (TMB) must decide the frequency of
inspections in the metro premises. Assume p > 0 is the price of the ticket, m > 0
is the ne the custumer must pay if he is discovered to be travelling without a
valid ticket (in that case the custumer pays for the ticket in addition to the ne),
and c > 0 is the cost of the inspection for the company (the cost of inspecting one
single person).
(a) Write the bimatrix game where the company can choose between inspecting
(I) or not inspecting (NI), while the costumer can pay (P) or not to pay (NP).
(b) Find Nash equilibria in pure or mixed strategies.
3. A pedestrial is hit by a car and lies injured on the road. There are n people
near the accident.The pedestrian needs immediate medical attention, which will
be forthcoming if at least one of the n people calls for help. Simultaneously and
independently each of the n bystanders decides whether or not to call for help to
the emergency number. Each bystanding obtains v units of utility if anyone calls
for help. Those who call for help pay a cost c. That is, if person i calls for help,
then he obtains the payo v c; if person i does not call but some other person
calls, then i obtains v; if nobody calls, person i obtains 0. Assume v > c.
Find the symmetric Nash equilibrium of this n-player game.
(a) Analyze rst if there is a symmetric Nash equilibrium in pure stretegies.
(b) If not, let p be the probability that a person does not call for help and look
for an equilibrium in mixed strategies.
(c) In equilibrium, which is the probability that at least one person calls for help?
Does this probability increase or decrease as n grows larger?
4. Find all Nash equilibria, both in pure and mixed srategies, for the following bima-
trix game.
1, 4 2, 3
0, 1 2, 3
1