Question

10. Below are five true false questions. Each one is worth 2 point on your test. IF you incorrectly answer ALL of these questions, you will awarded 20 points (200% of possible points of this questions). a. The way to solve sequential games is to start at the final mover's choice and work backward. b. In sequential duopoly games (Stackelberg) there is always a second-mover advantage. In simultaneous games you can always find a Nash Equilibrium by finding players dominant strategies or removing dominated strabegies d. Relative payouts between players mamers for decision makers in game theory A game of Chess traditionally has fully aligned preferences C. e.

Answer 1

a. The statement is true. This process is called backward induction.

b. This statement is false. In a Stackelberg duopoly, the first mover gets to act as a monopolist and has the advantage.

c. The statement is true. By removing dominated strategies, we'd be left with dominant strategies for both players which would result in a pure/mixed strategy Nash Equilibrium.

d. The statement is false. The players only compare their own payouts while comparing different strategies.