Purpose of this problem set: review of and get yourself familiar with simultaneo

Question

Purpose of this problem set: review of and get yourself familiar with simultaneous-move games. 1. Consider the "grade game" played and discussed in class: Column 12,6 Row a 88 :b,6,12 10,10 0. Does a rational player play b? Why or why not? i). Will which outcome be played out by rational players? ili). Would which outcome emerge if both players played their "worse" strategies? ív). How does each player rank the outcomes ín ii) and ii)? Is that the case that both players prefer the outcome in ií) to the outcome in iii), or the outcome in iii) to the outcome in ii)? Lessons learned from this simple game: Do not play a strictly dominated strategy, rational play can lead to outcomes that suck)

Explanation / Answer

a) No, a rational player will not play b, because if he plays b then the other player has an incentive to deviate and increase his utility. So, a rational player will not play b.

b) (a,a) will be the outcome played rational player because if suppose he plays b then the other player has an incentive to deviate and will obtain 12, so none will play b.

c) Player1 plays a and player2 play b or Player1 plays b and player2 play a. This will be the worse strategies.

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